Peter Hain: There has been a serious problem with dentistry, but it is a result of the problems that we inherited, which we are trying to put right. [Interruption.] No, no. We did inherit a serious problem: the Conservatives closed two entire dental schools. As far as Ynys Môn is concerned, over the past two years, 10 new dental practices offering NHS dentistry have opened throughout Wales and 26 practices have expanded their NHS dental provision. The number of NHS dentists in Wales has increased by 168, or a fifth, over recent years. Increasingly, we will see more NHS dentists provided under Labour in Ynys Môn. However, if the people of Ynys Môn follow the hon. Gentleman's lead and vote for the nationalists, they will get a Conservative Government and we will see the health cuts all over again.

Don Touhig: In February 2005, there were 156 community support officers in Wales, with funding secured to increase their number by 300.

Michael Howard: Labour Members are cheering the Prime Minister now, but let us find out what they really think of him. How many of them are putting his photo on their election addresses? Hands up! One, two, three, four, five, six. Does not that tell us all we need to know about they really think of him? [Hon. Members: "More!"] The Prime Minister promised to
	"tackle the unacceptable level of anti-social behaviour".
	Two and a half years ago he said he would remove housing benefit from antisocial tenants. Antisocial tenants still have their housing benefit and antisocial behaviour has got worse. In the words of the Chancellor, why should people ever believe him again?

John Hume: Prime Minister, could we get back to serious matters? Given that there has never been another war in the history of the world in which the vast majority of victims have been innocent civilians, does the Prime Minister agree that the time has come to create a world where there is no longer war or conflict? Given his massive international respect, will he join together with other world leaders to create the means of ensuring that there is no longer any war or conflict in the world? Does he agree that the best way of doing that, given that the European Union is the best example in history of conflict resolution, is for a special department of the European Union for peace and reconciliation to be created and to visit all areas of conflict with the principles of the EU, which will create a resolution of conflict anywhere in the world? Will he and his international colleagues make that historic decision as soon as possible?

Charles Kennedy: Staying on the issue of fairness, but looking at the other end of the age spectrum, why is it that we are now saddling so many of our young people with thousands of pounds' worth of debt wrapped around their necks because of the policy of imposing top-up fees? It is the Prime Minister's policy of top-up fees that is in direct breach of the pledge that he made in his last general election manifesto, so why should any of us believe any of the promises that he is about to make in the next general election manifesto?

Helen Jackson: Is my right hon. Friend aware that when I entered the House, 1,500 young people under the age of 25 were queuing up at jobcentres in my constituency for the right to work? Now, unemployment in my constituency is right down to 2 per cent., 1,000 of those young people have been helped into work through the new deal, and the major steel manufacturing unit is producing a record output of world class aerospace steel. Will he promise to keep full employment at the top of the agenda and to maintain that fine economic record?

Tony Blair: I think that although we did pretty well on this score, we could have done with even fewer Tories sitting opposite. But since the hon. Gentleman has given me the opportunity, I will tell him what I do not regret—[Interruption.] It is always important to balance up the regrets with the plus points. What I do not regret is the strong economy, investment in public services and falling crime, and I thank him for giving me the opportunity to say so.

Tony Blair: My hon. Friend is right to point out that in constituencies such as his, during the 18 years of Conservative Government, there were unemployed people and two recessions which hit constituencies in Wales particularly hard. [Interruption.] Conservative Members may yawn, but I think that the public know that the strong economy is the foundation of this country's success, and I can assure him that with this party in government, that economic stability will continue and the investment in public services will continue, not be put at risk.

Andrew Robathan: I beg to move,
	That leave be given to bring in a Bill to make provision for direction to police forces to enforce the law equally as it applies to settled communities and to travellers; to amend the law on trespass; and for connected purposes.
	One of the abiding principles that runs through the development of British democracy and society is that of equality before the law. The peasants' revolt, Magna Carta, the civil war, habeas corpus, the abolition of the Test Acts and many other instances show the development of this principle, and a vital principle it has been. But under this Government, some people have discovered that the law will not be applied to them equally. The terrorists of Sinn Fein are one such group, but I wish to dwell on the current treatment of Travellers in the country.
	As far as I am concerned, if people wish to live in caravans and travel around the country that is entirely their own affair. I do not believe in prescribing how people lead their lives, just as long as they do not impinge unreasonably on the lives of others. There is a permanent campsite at Aston Firs, in my constituency, which I have visited in the past and will probably visit during this election campaign. I believe the people there to be law abiding, and while there might not be many votes there for me, I think it important to make myself available to all my constituents.
	I was brought up on the romantic notion of Gypsies in attractive and colourful caravans pulled by horses, and of Romany people living their unique lifestyle travelling around the country. This still happens—indeed, only last week, there was a traditional caravan in Swinford, in my constituency. However, in contrast and entirely by coincidence, on Monday my constituency office was deluged with calls from concerned people in Lutterworth about an illegal Gypsy encampment at the Ladywood works. I went to see the site, where half a dozen caravans had moved in on Saturday night. A local garage had been closed because the 17-year-old female cashier said that she had been intimidated by Travellers. When I spoke to the owner, he told me that he had not reported it to the police because the last time he caught a Gypsy on closed circuit television stealing something from his forecourt, the local police had advised him not to press charges because he might be vulnerable to criminal damage in retaliation. What a disgrace!
	Another three caravans have now arrived in Lutterworth on the same illegal site, where they are trespassing. When the first ones arrived, one of the Travellers made an offer to the manager of the site, saying that they would leave straight away if paid £350 for a van. When I visited the site, helpful police officers were present. When I pointed out that one car had no road fund licence, the officer explained that although the owner of it was committing an act of trespass, the police had no rights to enforce the law on private land. The phrase Catch-22 comes to mind.
	At this site, one of the particular complaints of the businesses based there was that human excrement had been left on their doorsteps. A couple of years ago in Northfield park in Blaby, I saw an astonishing amount of rubbish, including abandoned cars, that had been dumped by Travellers. Local residents were so intimidated that they did not dare use the park. I met some aggressive Travellers who were, shall I say, extremely impolite to me, but the police stood off, not wishing to make trouble. That is a pity, because two issues relating to caravans and the police have been drawn to my attention by people involved in the legal caravanning world.
	The first is the width and length of caravans. Photographs published in The Sun and elsewhere show that some caravans have twin or even triple axles and they are too long to be towed legally by anything other than a full-sized commercial vehicle in the UK. At the same time, a maximum-width caravan that can be towed in the UK is just over 7 ft 5 in. Photographs in The Sun on 12 March show a German-made LMC caravan just under 8 ft wide. That is illegal, yet the police very rarely stop those sorts of illegal vehicles. Perhaps the Minister might like to answer the written question that I have already tabled about prosecutions for over-wide or over-long caravans in this country.
	The second and enormously important issue for the police is theft. Some 5,000 touring caravans are stolen and not recovered each year—about 20 per cent. of the total UK sales of new caravans. All these new caravans have CRIS identification numbers and generally have transponders in them. If a new caravan is found without such means of identification, the question should be asked—why not, and is it stolen? Unfortunately, when one police officer in Bedfordshire followed such a course of action, he was moved to an office job because he was upsetting Travellers in Bedfordshire. He also upset the local social services, which feared that they might have to find accommodation for families whose caravans were confiscated. Surely it is the duty of the police to make simple inquiries to ascertain whether caravans are stolen.
	It is also interesting to note how many brand-new vehicles tend to be pulling these vans, and it might be pertinent for the Inland Revenue and Customs and Excise to be making inquiries about taxation and VAT. Little council tax gets paid and I doubt whether much else gets paid either.
	If any hon. Member fails to tax his car, I would expect him to be prosecuted with the assistance of the police. If he or she dumps rubbish on public land or by the side of the road, he or she is committing an offence. Human excrement in a public place should incur the wrath of environmental health departments. Furthermore, we all pay taxes and the overwhelming majority of our constituents pay council tax for the services that they expect to receive.
	It is not unreasonable for us all to obey the laws of this country, whether they be planning laws, motoring laws or laws relating to environmental health. Illegal encampments of Travellers have been much in the news recently and one does not have to be a reader of The Sun or the Daily Mail, which I understand have both campaigned on this issue, to believe that it is wrong for people to flout the planning law in a flagrant fashion and then apply for retrospective planning permission.
	Sadly, the Government believe, and I am quoting from a Government document:
	"Whilst some planners think that treating everyone the same helps to ensure equality, this is not the case. Explicit recognition of difference is needed to ensure that the right action can be taken to deliver a planning service responsive to different needs within the communities it serves".
	Similarly, on unauthorised camping, the Government have said:
	"Where the occupier of the land is a public body such as a local authority, then every effort should be made to avert forced eviction. Where trespassers are for instance Irish travellers, public bodies are required under the Race Relations Act to have due regard to the need to promote good race relations".
	The law does not apply to everyone; the law is not applied equally to all people in this country.
	I think that the overwhelming majority of people in this country, faced with casting their votes in a general election, will take the view that everybody should be subject to the same laws. I propose that trespass, where it involves occupancy, be made a criminal offence. That would give the police the certain power to move on trespassing Travellers. The House will know that that is exactly what happened in Ireland under the Housing (Miscellaneous Provisions) Act 2002. That, of course, is why there has been an influx of Irish Travellers into this country, where we are seen as a soft touch.
	I further propose that councils be allowed to refuse applications for retrospective planning permission by Travellers or rogue developers who, often advised by disreputable lawyers, are cynically manipulating the planning system. I would allow local councils to ensure that, where planning permission does not exist, caravans are rapidly removed and that large fines or confiscation of assets are imposed on Travellers who are trying to profit from illegal developments.
	Police must know that they have not only the power but the duty to stop Travellers of whom they are suspicious and to check their road fund licences and the roadworthiness and provenance of their vehicles. If I am stopped by a police officer, I must be displaying my road fund licence on my car and I may be required to produce my insurance. There is no reason why that law, too, should not be applied to Travellers, but police officers seem wary of doing so because they fear that it may cause trouble.
	Finally, the Travellers who are behaving illegally—they are probably a minority of the travelling community—know their rights, but not their responsibilities. I propose a review, or even the repeal, of the so-called Human Rights Act 1998. That Act sounds attractive, but it is used by smart, slick lawyers to drive a coach and horses through the laws that the rest of us have to obey. In particular, the Act has allowed Travellers to break planning laws, but it takes no account of the rights of others whose lives are made a misery by illegal Traveller encampments. When my right hon. Friend the Leader of the Opposition made exactly that suggestion, one person commented that it had
	"the whiff of the gas chamber about it".
	Only a bitter, twisted and perverted mind could imagine that to say that all people should obey the same laws is in some way wrong. We are all equal before the law, and I propose that that equality should be enforced.
	I urge the House to support this Bill.
	Question put and agreed to.
	Bill ordered to be brought in by Mr. Andrew Robathan.

Paul Tyler: I add my thanks on behalf of my colleagues to those that have been expressed. Perhaps I could also be allowed to thank not just the Officers of the House, but right hon. and hon. Members of all parties with whom I have been happy to work for some years. The House is often at its best when we work across party lines for the achievement of better business and a better legislative product. We all regret it when a straitjacket is imposed but, as the Leader of the House said, this is not a precedent for the way in which Parliament usually operates. These are abnormal times and I accept that this is evidence of the way in which constructive consultation behind the scenes in both Houses can achieve a sensible way of doing business in abnormal circumstances.
	If I have any reputation at all as I leave this House, I hope that it is that I am capable both of making a brief point and a point briefly, so I hope that by making a succinct contribution this afternoon I do not endanger that reputation. We should get on with the substance of the business so that we have the maximum time for scrutiny.
	Finally, I thank both the Leader of the House and his Conservative shadow for their kind remarks about me.

Eric Forth: I am not sure that I was, but we shall settle that later in the usual way. The Leader of the House is looking very embarrassed and we would not want that, would we?
	There is a serious point. I do not want to dwell on it excessively, but merely to put down a marker. It is that we are being asked to legislate—to make the law of the land—in an extremely truncated and restricted way, on the basis that a small number of no doubt senior and eminent people have decided what will be and are then asking the rest of us, as Members of Parliament, to say, "Oh, all right then. You're only giving us an hour to consider an entire Bill". Even worse, we are being asked to sign up to the fact that
	"any motion made by a Minister of the Crown may be proceeded with . . . until any hour, and shall not be interrupted".
	That exemplifies the degree of control that the Government seek and have been given by the motion. They call the shots and the rest of us have to fall meekly into our places.
	When we consider the detail of the motion, we find that the House of Commons is being asked to deal with the entire Finance Bill in four hours, and that other serious measures—on disability discrimination, international organisations or whatever—are to be agreed to in one hour for each. In all reasonableness, that cannot permit of any degree of proper parliamentary scrutiny. In what we are told are exceptional and unusual circumstances—although I worry about that—the Government are saying, "Trust me. We the leadership have agreed that this will be the case and the rest of you are expected to fall into place." I have to say that looking around the Chamber it looks as though that is highly likely to happen, but we should be worried about it. It is yet another indication of the extent to which the proceedings of this House have been downgraded that we are being asked to sign up to the motion with a smile.
	Of course, everybody's thoughts are on the upcoming election. That is perfectly natural. But it should not mean that we legislate in such a way that we eliminate all possibility of parliamentary scrutiny, with one great exception—the saving of our constitution and our parliamentary process; thank goodness for it—the House of Lords is still not controlled by the Government. Their timetable is still theirs to control. The Government still do not have a majority in the House of Lords.
	As a Member of this House for some time, and someone who loves this place and is happy to spend much of my time here, it saddens me to acknowledge that in the motion we are surrendering our role in the legislative process and expecting our colleagues in the House of Lords to do the real work of scrutiny. That has been the reality for some time. It continues to be the reality and the motion reflects that; in fact, it sets it out in words simple to understand.

Peter Hain: It is not the place to discuss the merits of the Identity Cards Bill, about which I have an honest disagreement with the hon. Gentleman. I am a long-standing civil libertarian and proud of it, and remain so, but I honestly think that the Identity Cards Bill is a common-sense measure in an age when we must supply photographic proof of identity to take an internal flight in Britain. Increasingly, we must come up with the kind of identification to travel abroad that the new identity card will provide on our passports, driving licences and so on. It is a common-sense measure and, no, we have not withdrawn it; we could not get the Opposition's agreement to allow it through, as other Bills have gone through, so it will fall, but it will do so as a result of the express opposition of the Liberal Democrats and Conservatives who did not give it the passage that it needed and should have had in the interests of security and the safety of all our citizens. I regret that very much.

Ordered,
	That, of the Resolutions of the 22nd day of March last, the following be read—
	(a) Nos. 1 to 6, 11 to 17, 22 to 27, 30, 43, 47, 48, 50 to 53, 56 and 58;
	(b) Procedure (Lorry Road-User Charge);
	(c) paragraphs (a), (e) and (f) of Procedure (Future Taxation); and
	(d) paragraph (b) of Finance (Money).
	Bill ordered to be brought in upon the said resolutions: And that the Chairman of Ways and Means, Mr. Chancellor of the Exchequer, Mr. Secretary Prescott, Mr. Secretary Darling, Mr. Secretary Reid, Ms Secretary Hewitt, Mr. Secretary Johnson, Secretary Ruth Kelly, Mr. Paul Boateng, Dawn Primarolo, Mr Stephen Timms and John Healey do prepare and bring it in.

Paul Boateng: We have had this discussion in the past. The hon. Gentleman knows that, as a result of the amendments that we have made, there is an increase in the yield. That is clear in the Red Book and we have never made any pretence otherwise, but we have focused and targeted the relief better. We have ensured that we are assisting first-time buyers. Doubling the threshold means that some 50 per cent. of first-time buyers will not pay stamp duty and that must be welcomed by all.

Paul Boateng: We have focused relief where it can do the most good. I would have thought that everyone would welcome that. I do not recognise the presentation of the Budget that the right hon. Gentleman describes. The combined effect of the Budget measures is that revenues from residential property transactions are forecast to fall by £220 million and revenues from commercial property transactions are forecast to rise by £580 million. We have always made that absolutely clear. It has always been clear in the Red Book for all to see. It was always crystal clear in the extensive debates and discussions that my right hon. Friends the Chancellor and the Paymaster General, my hon. Friends the Financial Secretary and the Economic Secretary and I held with Opposition Members in the immediate aftermath of the Budget.
	I always enjoy the contributions of the right hon. Member for Charnwood (Mr. Dorrell) because he has extensive knowledge and experience of government. However, it is rich for him to now play the innocent—the shocked maiden—in such a way about the presentation of these matters. I do not think that he can expect us to take his complaints seriously.

Paul Boateng: I do not have the figures for Brent, but I fancy that they will be available to my hon. Friend the Financial Secretary by the end of the debate. I am sure that he will provide a characteristically robust response to the hon. Gentleman's point.Mr. Bercow: Will the Chief Secretary give way?

Paul Boateng: I do not need much temptation to go into detail, but I understood that my brief for this afternoon was to resist temptation. I find the blandishments of the hon. Member for Buckingham absolutely irresistible. What concerns me is why he would favour the affirmative resolution procedure—[Interruption.] Let me finish my point. What concerns me is why he prefers the affirmative resolution procedure to the procedure that we have adopted. That procedure enables us to have this debate. It meets the concerns and the substantive points made to us by academia and those engaged in spin-outs. If he sees a particular advantage in the affirmative resolution procedure, I am sure that the House would be glad to hear what it is.

Paul Boateng: We had a full discussion on that when the House was coming to a view on civil partnerships. I know and respect the hon. Gentleman's views on the issue, although I do not share them. I believe that the House came to the right conclusion on how to reflect societal change in the Civil Partnerships Act and the provisions of the Finance Bill.
	The immense contribution made by our armed forces, who serve our country so well in peace and in war, is reflected in the clause that will ensure that lump sum awards paid to servicemen and women injured in the line of duty are tax free, whether paid to a serving member of the armed forces or to a person who has left the service. The provision amends the Income Tax (Earnings and Pensions) Act 2003 to ensure that benefits payable under the Armed Forces (Pensions and Compensation) Act 2004 are treated in the same way for tax as the equivalent benefits payable under the armed forces pension scheme. The new lump sum in-service injury awards will be exempted by the clause—a measure that I know has the support, which it warrants, of all hon. Members.
	The measures and others like them help to modernise the tax system. They will enable a fairer society to emerge and reflect the new challenges arising from that changing society. Britain also faces new and evolving environmental challenges, in respect of which we have an obligation to future generations. We have therefore provided for the standard rate of landfill tax to increase as part of a principled national policy to reduce the volumes of waste sent to landfill and to encourage more environmentally friendly alternatives. Building on the changes made in 2003 to vehicle excise duty that reflect vehicle carbon emissions, the Bill provides for an increase in VED rates only for the two highest carbon dioxide bands; the four least-polluting carbon dioxide bands will remain frozen.
	The Budget lays down measures that will enable our country to respond to and meet the challenges of our changing society in the global economy. The Finance Bill enacts measures to which the House has already agreed in principle. I commend it to the House.

Michael Fallon: The point is not whether we in the House object to any of the clauses, but that they will not be exposed to scrutiny and proper deliberation by those outside the House, who may well have views—indeed, some have sent us representations on certain clauses. The travesty of taking more than 100 clauses in four hours means that many items will pass on to the statute book without have been subjected to the proper deliberative scrutiny that they should have and would have received in a Committee.

George Osborne: Because the negotiations took part as part of the washing-up process covering every piece of legislation that we will discuss today and in the next couple of days. We have let certain provisions through, and I shall explain why.
	We have let through the new regime for trusts for vulnerable people, which has been consulted on, which all the disability charities broadly welcome and which we support. We have agreed to the alternative finance arrangements to ensure that people whose religious beliefs forbid them from receiving or paying interest—such as those who adhere to sharia law—are not discriminated against by the tax system. We think that is fair.
	The Chief Secretary unfairly implied that my hon. Friend the Member for Hertford and Stortford (Mr. Prisk) had been dismissed from the Front Bench; in fact, he is an Opposition Whip but he is using his experience to speak in today's debate from the Back Benches. My hon. Friend said that the clauses on film tax relief continue the sorry tale of the Government's increasingly convoluted attempts to give tax breaks to film production without creating huge tax loopholes—a tale of how not to write tax law. As I am sure my hon. Friend the Member for Sevenoaks (Mr. Fallon) agrees, we should consider those clauses in much greater detail, but in the past two days we have received strong representations from the film industry expressing its wish that the relief be extended past July, when it is due to run out. The industry felt that the confusion and chaos caused by the changes that the Government have made in the past couple of years would be increased if the measures were not included in the Bill. Having listened to the representations made by the film industry and by MPs representing film production companies, we are prepared to allow the clauses to pass to enable the extension of the tax relief beyond July.

Michael Jack: Can my hon. Friend give me an assurance that when he introduces his first Finance Bill and takes part in the first Conservative Budget after 5 May he will carry out a proper evaluation of the help that has been given to the film industry? Because of the difficulties encountered by the Government it is genuinely difficult to see for the wood for the trees, and I would be grateful for an assurance that those reliefs have benefited the British film industry.

George Osborne: My hon. Friend is absolutely right. I think that he is referring to table 1.2 on page 12 of the Red Book, which shows that the initial impact of ending stamp duty land tax relief in disadvantaged areas will cost £340 million. As I said, in the Chief Secretary's case, it appears to be the unread book.
	As always with the Government, it is not what they say that is real story but what they do. In the Budget, what the Chancellor
	"gave with one hand he took away with the other".
	Those are not my words, but the words of the much respected independent Institute for Fiscal Studies. As my right hon. Friend the Member for Charnwood (Mr. Dorrell) reminded us, raising the stamp duty threshold from £60,000 to £120,000 in clause 95—a long overdue but none the less welcome measure—is more than cancelled out by clause 96, which removes stamp duty land tax relief for disadvantaged areas. The Chief Secretary has not given us a good explanation of why he is ending that much trumpeted relief for disadvantaged areas. He said that he would replace it with another scheme, but it is worth only £300 million over three years, which is considerably less than the £340 million in the first year—and I think that the figure will rise—that is taken away by the ending of that relief for disadvantaged areas.
	The Chancellor said, as though it were a mere technicality, that he was
	"aligning the timing of oil companies' corporation tax payments more closely with petroleum revenue tax."—[Official Report, 16 March 2005; Vol. 432, c. 264.]
	Who would have guessed that what he really meant was a £1.1 billion windfall tax on the oil industry? The oil industry, I suspect, has learned to live with that tax, but pensioners will be dismayed to discover, as my hon. Friend the Member for Chichester (Mr. Tyrie) reminded us, that the £200 payment that the Chancellor flourished as an answer to his soaring council taxes is a one-off. Page 12 of the Red Book makes that clear, even if the Chancellor and the Chief Secretary have not done so.
	Unlike every other measure in the Budget, the £200 payout to pensioners is for this election year only, whereas the hikes in council tax will go on year after year if Labour is re-elected. What a cynical pre-election manoeuvre from a Government who have lost any sense of fair play. What a contrast to the sustained year on year on year council tax discount that we are offering, which will be worth up to £500 for millions of pensioners. What a classic example from this vote now, pay later Budget.
	There is a secret tax and spending agenda in this election. It just happens to be the Labour party's: a secret agenda to try to conceal from voters the massive tax rises that Labour needs to pay for its spending plans. Even after 66 tax increases on hard-working families, the Government have managed to create a black hole in the public finances. The Chancellor admitted as much when he was forced to concede that the current deficit is £5 billion higher than he forecast last year, and that he will borrow £168 billion over the next five years—more in each year than he forecast even 12 months ago.
	It is not just our view that there is a black hole. It isthe view of almost every single independent organisation and economic commentator. They are clearly thinking what we are thinking. The International Monetary Fund is thinking what we are thinking when it says that Britain's national accounts have
	"deteriorated sharply over the last five years"—
	in other words, from the moment that the Labour Government ceased to follow the previous Conservative Government's spending plans. The Institute for Fiscal Studies is thinking what we are thinking when it says that taxes will have to go up £11 billion a year after the election to pay for Labour's spending.
	The question for Labour in the election, and for the Chief Secretary, either now or as we encounter each other in the television studios over the next couple of weeks, as we will no doubt do, unless he is already off to his posting and being measured up for his high commissioner's outfit—the ostrich feathers and all that—is not whether taxes will go up, but which taxes Labour will increase in future Finance Bills. Will it be capital gains tax on homes, or council taxes, pushing bills towards the £2,000 mark, or national insurance—Labour's tax of choice? To raise the £11 billion in taxes that the IFS says the Government need, national insurance will have to go up 3p in the pound. That is £1,000 more a year in taxes for a typical hard-working couple.
	Before the last election, as my right hon. and learned Friend the Leader of the Opposition reminded us earlier today, the Prime Minister said that reasonable people should not suppose that Labour would raise national insurance, then in the first Budget after the election he put it up. What does the Chief Secretary think reasonable people should suppose before this election about Labour's plans for national insurance? I am not sure whether he will have an opportunity later in the debate to answer the question, so perhaps the Financial Secretary will do so instead.
	Taxes will go up if Labour is elected. That is the simple truth at the heart of the election—a truth that, as far as Labour is concerned, dare not speak its name. What will those taxes pay for? More waste, more bureaucracy, more bureaucrats—in other words, more of what we have seen for the past eight years. The Financial Secretary knows that all the money has been wasted, because he famously told us so. He said that
	"we're going to have an election. . . when people will say 'we've paid a lot of taxes but what has really been achieved with all that money?' . . . Too often a lot of money has been spent. But very little seems to have been achieved".
	What sound words from the Financial Secretary. He is right. A lot of money has been spent, but very little seems to have been achieved. After 66 tax rises and eight years of talk, average hospital waiting times are higher, cancelled operations are up, and more people die of hospital superbugs than die on Britain's roads every year. After 66 tax rises and eight years of talk, one in three 11-year-olds leaves school unable to write properly, and school truancy has risen by a third. After 66 tax rises and eight years of talk, crime has risen, violent crime has almost doubled and the detection rate has fallen.
	Even on the economy, which the Chancellor of the Exchequer says he wants to put at the heart of the election campaign, after eight years of boasts and 66 tax rises, we have fallen from fourth to 11th in the world competitiveness league, our trade has gone from a surplus to a record deficit, a million manufacturing jobs have been lost, productivity growth is down by a third, as is the savings ratio, and now we discover that average take-home incomes for families have fallen for the first time in almost 15 years. Labour has taxed, wasted and failed, and hard-working families have paid the price.
	So it will fall to the next Conservative Government to sort out the mess in the public finances and to deliver the lower taxes, cleaner hospitals, school discipline, controlled immigration and more police that the people of this country want to see. It will fall to the next Conservative Government to put public spending on an affordable path that avoids Labour's tax rises and delivers tax reductions for hard-working families. We will begin that task in our first Budget and our first Finance Bill in just two months' time.

Vincent Cable: The commitment to increase the threshold for stamp duty to £150,000 will be in our manifesto. I have already said that publicly. There will be no black hole because it is fully costed. The manifesto with full costings will be published in 10 days, and will explain precisely how the cost is covered. We will not be proceeding with the Government's alternative local enterprise proposals. Our plans have all been fully costed, in contrast to the James initiative, on which I have commented frequently and about which doubts are shared by many of the hon. Gentleman's colleagues, although we will not go into the sad history of the past couple of weeks.

Vincent Cable: I was completely up front in the weeks running up to the Budget, arguing that the disadvantaged area tax relief provision for commercial property should be dispensed with, because the main beneficiaries were not small shops in Sheffield, but large commercial property developers in Canary Wharf and such areas. That is why we argued for getting rid of it and we believe that is the correct thing to do. We remain committed to lifting the stamp duty threshold for domestic properties further to £150,000 a year. That is fully costed and will be fully explained in the manifesto when we present it shortly.
	On the specific Budget provisions, I agree with the hon. Member for Tatton (Mr. Osborne) that what has been taken out is appropriate and what remains is sensible and something that we can all support. On the major change, the anti-avoidance measures, we need a great deal more time for reflection. We are all committed to such measures where they are effective, but they are at the core of the Government's budgetary arithmetic, as the Chief Secretary knows. They propose to raise £3 billion over three years, so the ability to make the measures stick is central to the Budget's credibility. For the reasons that have partly been given, it is right that we be given further time for reflection.
	On the international provisions, the so-called double no tax agreements, the point has been made, not just by people who currently benefit from these measures in multinational companies but by accountants who deal with them, that by dealing with such matters in too clumsy a way there might be some short-term gain in revenue, but some long-term loss. Equally, I understand that there is an enormous degree of complex argument around the 15 or 20 anti-avoidance measures concerned with financial derivatives, with which the Government propose to deal, and the danger of tackling those in the wrong way or in a clumsy way would simply be to raise the cost of capital for companies, not necessarily to save revenue for Government. So a great deal of thought is required on the various measures, and I welcome the opportunity to pursue them further in that proper way.
	Our main criticism of the Finance Bill was not so much for what was in it as for what was not in it, and we hope that whoever forms the Government in a few weeks' time will address these issues. The first is the transparency of the budget process. It is already very clear, because of the uncertainties surrounding the £3 billion revenue from anti-avoidance measures, that we would have to take on trust much of what the Inland Revenue says about projected revenue. There is also much room for controversy about projected growth rates, and that is one reason why we have argued strongly that there has to be a proper system of independent audits of the Budget's assumptions to give to fiscal policy the same kind of integrity that exists in monetary policy. That is not a doorstep campaigning issue, but I hope that the Government are listening to the arguments and that if they are returned they will address the problem—that we have a proper degree of independence in the appraisal of fiscal policy that a body such as the National Audit Office, properly supported by economic advice, would be able to give.
	The Chief Secretary acknowledged the second omission when he said that the Government are responsive to the need for reform of local taxation. I do not know what that is coded language for and how radical the reform will be when we get it, but as he knows we are committed to scrapping the council tax altogether, and the sticking plaster solution of £200 in one year is clearly not satisfactory, although I am not sure that the Conservative's £500 is satisfactory either. I happen to live in a constituency that has had a Conservative-controlled council for the last three years that has raised council tax by £500 per household over that period, so my constituents will derive no benefit from that. In addition, there are many households where one occupant is a pensioner and one is not that would not qualify for the discount, and there are many low-income families who are not pensioners who would not qualify for that discount either. Therefore, that provision is itself inadequate. It may be sustained, but it is not adequate and it does not deal with many of the injustices that lie at the heart of the council tax. It does not create a system that is based on ability to pay. If the Chief Secretary is as good as his word and we have fundamental reform if the Government are re-elected, I hope that they will consider income-based systems of taxation, as the Liberal Democrats have suggested.
	The third omission relates to pensions. The right hon. Member for Fylde (Mr. Jack) made the point earlier that many people will be struggling over the next few weeks with all the complexities of pension credit and other forms of means-tested benefit without the help that we are sometimes able to give them, and that illustrates the much wider point that trying to deal with pensioner poverty in this way excludes many pensioners, it creates high rates of marginal withdrawal or marginal rates of tax for pensioners and is a fundamentally unsatisfactory system. We know that the Government are considering, through the Turner commission, a much wider-ranging reform. We hope that they eventually come out, as we do, with the concept of a citizen's pension payable to at least older pensioners without extensive means-testing and without the complexity and the high marginal rates that currently apply.
	Again in a spirit of consensus, it is clear that the three parties among us that are competing at the election, whatever the sound and fury, are agreed on a series of propositions. The first concerns taxation. The simple brutal fact of the matter is, as the Institute for Fiscal Studies, which the hon. Member for Tatton called in aid several times, has pointed out, that all three parties would increase taxation after the next election, and that there would be a minimum £24 billion a year increase under the Conservatives as a result of fiscal drag throughout the next public spending review period. That is common ground.

Stephen Dorrell: It is obviously true that any Government who implemented changes in the spending plans would have to accept responsibility for those changes, but the point that the hon. Gentleman was making was to suggest that a Conservative Government based on those plans would have to increase rates of taxation, and that is simply not correct.

Stephen Dorrell: I begin by declaring an interest as a director and shareholder of a manufacturing business. Like many others, I would like to echo the closing remarks of the hon. Member for Twickenham (Dr. Cable) in wishing the Chief Secretary success in his new career. We will follow his developing life with interest and we shall miss his bonhomie.
	We are discussing a reasonably heavily truncated finance Bill today in the circumstances of the run-up to a general election, but as my hon. Friend the Member for Tatton (Mr. Osborne) reminded us, the degree of change that has been introduced by the Government in the originally published Bill is nowhere near the degree of change that was agreed to in the run-up to the 1992 election. I remember some of that because I became Financial Secretary immediately after the 1992 election and had to pick up a substantial amount of legislation that had been drafted ahead of the election and dropped in the finance Bill in the run-up to the 1992 general election. I congratulate my hon. Friend on securing the Government's agreement to drop some of the most complex aspects of the original legislation, but my hon. Friend the Member for Sevenoaks (Mr. Fallon) was correct to remind the House of the difference between the Finance (No. 2) Bill that we are discussing now and the finance Bill that was put through ahead of the 1992 general election. It is regrettable, although I am sure that my hon. Friend the Member for Tatton secured the best deal possible, that the Government were not willing to delay the legislation that is included in the Bill in order to ensure that it was subject to proper parliamentary scrutiny after the general election.
	The real issue with this Finance Bill is not the measures in it, but those that are not in it, but would be necessary if the Government's plans were in truth to add up. I am interested not in what is in the Finance (No.2) Bill that we are discussing today, but in what would be in the Finance (No.3) Bill that a re-elected Labour Government would have to introduce.
	All our constituents know, and every Member of this House knows, that we have been here before. In 2001, ahead of that year's general election, we and our constituents were told by the Prime Minister and the Chancellor that there would be no need for tax increases if a Labour Government were re-elected. At the first occasion after that election the Chancellor came to this place and proposed in the 2002 Budget an £8 billion tax increase—an increase in the national insurance contributions paid by both employers and employees. The argument advanced at the time was that all of that was necessary because the money was all going into national health service expenditure. That always was a dishonest argument—it was just as dishonest today, when the Prime Minister used it at the Dispatch Box during Prime Minister's questions, as it was on the day it was first used in the 2002 Budget.
	We all know that the total tax yield that comes out of the tax system goes into the Consolidated Fund and that it is then for the Government to decide priorities on the use of that money. All the Chancellor was seeking to do by labelling that £8 billion tax increase in 2002 as money for the NHS was to sweeten the pill of the extra burden that the Labour Government were imposing on voters.

Stephen Dorrell: My hon. Friend is entirely right; there was an unheralded tax increase after the 1997 election and another after the 2001 election. Of course, we all now know the effect that was achieved, and I want to focus on the tax increase following the 2001 election, because the Institute for Fiscal Studies published last week an analysis of the effect of that increase on disposable incomes.
	It is helpful to us in the run-up to this general election for voters to be reminded of the effect of the tax increase that the Government introduced immediately after the previous general election in order to make the books balance in the early years of this Parliament. Last week, the Institute for Fiscal Studies published a report on the movement of disposable incomes during recent years. It reported that, for the first time since the early 1990s, real disposable incomes fell in 2003–04 compared with 2002–03. Why did they fall? They fell because of the £8 billion tax increase that the Chancellor introduced after the previous general election, having promised beforehand that an increase would not be necessary.
	It is not just a matter of the total taxation that the Government have imposed, which has had the effect of cutting real disposable incomes in the last year for which figures are available, which is 2003–04. It is also important to examine the distributional effect of the tax policies that have been pursued by this Government not just in this Parliament, but throughout the period since 1997, as my hon. Friend the Member for Hertford and Stortford (Mr. Prisk) rightly says.
	The Chancellor is very fond of saying that he has not increased rates of income tax. That is a dishonest argument for two reasons. First, it draws a polite veil over the fact that he has increased the rates of national insurance contributions. Most of our constituents and, I suspect, most of us, do not notice the difference in our pay packets between increases in income tax and increases in national insurance contributions. The truth is that marginal tax rates have increased, as one sees if one considers tax and national insurance together. Beyond that, the combined effect of freezing both the personal allowance in 2002 and the higher rate bands, in addition to rising income levels, is that 7.5 million income tax payers are paying at a higher rate than they would have done if the whole system had been fully indexed to earnings in 1997.
	So when the Chancellor of the Exchequer talks about tax rates not having gone up, he is wrong on two counts: first, national insurance contributions; and secondly, the unplanned and unfair effect of holding down the allowances and bands in the tax system and not indexing them to earnings. We should do well to remember and to remind our voters of this statistic: the Labour Government since 1997 has meant that 7.5 million—very nearly one third—of all income tax payers are paying at a higher marginal rate than they would have done if the system had been fully indexed to earnings since 1997.
	The Institute for Fiscal Studies and an analysis of the tax record of this Government in office have demonstrated that the effect of a Labour Government is to raise the tax burden on income tax payers. The IFS is relevant to this debate not just because of its analysis of the effect of a Labour Government on the tax burden in the past, but because, as we have already mentioned in this debate, it is offering a warning of what a re-elected Labour Government would mean again.
	I said in an intervention on the hon. Member for Twickenham that the IFS had examined the Government's published plans and those of my right hon. and hon. Friends on the Conservative Front Bench, and concluded that the Government's plans include what in the jargon is called a structural deficit—that is to say, a black hole or a need to raise taxes in the next Parliament in exactly the same way as they were raised in this Parliament because the Government have not been able to control the growth of Government expenditure.

Stephen Dorrell: I am grateful to my hon. Friend. I regret to say that I have not committed that list to memory, but perhaps it might now be obvious to the House why I did not attempt to do so. My memory is failing me and I do not have that ability.
	Almost nobody who has examined the Government's financial plans believes that the Government can deliver on tax and revenue through the next Parliament without resorting to precisely the same expedient that they used in 2002—a post-election tax increase. When the Chancellor says that he wants to put the economy at the centre of the election campaign, I say, "Hooray!" Conservative Members must argue to the electorate that the meaning of a re-elected Labour Government is entirely clear—it is clear in the figures and evidence and, if one does not want to look into a crystal ball, it is clear in the Red Book. A Labour Government means a further substantial tax increase.
	Labour has delivered tax increases. In recent times, it has also delivered falling living standards, because government has grown faster than the individual's capacity to pay for it. This year, the IFS published two studies, one considering the Government's future plans and the other examining the Government's record in office, which demonstrate that when Labour raised taxes in 2001 and, as my hon. Friend the Member for Hertford and Stortford has rightly pointed out, in 1997, it had the effect of cutting living standards. The IFS said that we must expect a re-elected Labour Government to do the same thing again. The choice for voters in this election could not be clearer, and I cannot wait to explain it to them.

Michael Fallon: I shall speak briefly, simply to register a complaint. If discussing 11 clauses in 1992 was a constitutional outrage, what is discussing 106 clauses and 203 pages of legislation in four hours?
	I do not doubt that my hon. Friend the shadow Chief Secretary was faced by an unenviable choice—he did not have the whip hand in those negotiations—but it is extremely unsatisfactory that more than 100 clauses, and more than 200 pages of financial legislation, will pass into law without their being properly scrutinised. If those clauses are not scrutinised in Committee, they will not be scrutinised in the other place.
	As my hon. Friend the Member for Tatton (Mr. Osborne) has said, some of those clauses may be welcome and others, which have been subject to consultation, may raise no serious dispute. However, the purpose of the Standing Committee on the Finance Bill is to go through those clauses in detail—the process is familiar to all of us who have served on a Standing Committee on the Finance Bill—and to consider representations that emerge after the final text has been published. Such representations do not always come from bodies that the Revenue or the Treasury have consulted directly. The Chartered Institute of Taxation, for example, has already made representations about a number of the clauses, and the Law Society has sent me, and I am sure other hon. Members, a catalogue of suggested improvements. Such amendments will not even be considered, and we will pass ill-considered and badly judged legislation into law.
	If the clauses have already been partially consulted on, there is no rush. I am sure that my hon. Friend the Member for Tatton would be happier to reconsider those clauses and include them in his own finance Bill, which I look forward to his presenting to the House in the summer months. Even in the unlikely event—a catastrophe—of this awful Government being re-elected, it would be perfectly possible for them to seek to re-enact the clauses in just two or three months' time. Even those clauses that the Government claim are necessary to tackle tax avoidance would not lose from being delayed by a matter of weeks, if not a couple of months.

Michael Jack: I suppose that I can count myself as a Finance Bill veteran. I start by reminding the House of my declaration of business interests, which is properly recorded in the Register of Members' Interests.
	In today's debate, my hon. Friend the Member for Tatton (Mr. Osborne), to whom I listened with interest, quickly sped past the question of life assurance taxation. I had hoped that I might hear from him that an incoming Conservative Government would examine that area. I, for one, am disappointed that this truncated Finance Bill does not contain any measures to re-examine how the internal rates of return and taxation are calculated on life assurance products and to try to improve the rates of return for such financial devices. Those rates of return are particularly important to, for example, pensioners and those on endowment mortgages, who have seen substantial drops in the performance of those products, which are part of their long-term financial security.
	One of the many missing themes from this Finance Bill is a lack of attention to detail on long-term savings. One of the interesting features of the current financial press are articles pointing out the slow uptake of ISAs at the end of the financial year, one reason for which is that the Chancellor has slowly but surely stripped out many of the initial starting benefits of ISAs.
	If the Chief Secretary decides to go to South Africa, I wish him well. He may decide to go South Africa anyway when he is in opposition, because he will have plenty of time on his hands.
	ISAs and other financial products have not closed the savings gap in this country, and savings have fallen substantially under this Chancellor. Although it is entirely correct to examine tax and revenue issues, which I shall discuss in a few moments, savings are important in terms of capital accumulation in this country. Under this Government, savings have fallen, and this Finance Bill contains no measures whatsoever to address that important point.
	I want to examine a number of measures in the order in which they appear in the Bill. One of the first measures to which we are invited to agree is the
	"Consolidation of current rates of hydrocarbon oil duties".
	The Chancellor has had to postpone his revaluation of those rates in the light of turbulent conditions in the oil market. But there is a more important conclusion that comes from the question of oil pricing and upon which the Government should be reflecting. The Prime Minister has made it clear that matters connected with climate change are one of his top priorities, and they lie at the heart of the G8 priorities. As a result of the markets, there has been a substantial increase in the cost of hydrocarbon fuel, but no proportionate decline in the use of motor-powered vehicles. The market price increases, notwithstanding the revalorisation that the Chancellor still has up his sleeve, represent an important challenge to the Government's environment agenda, because they will have to look for other measures to try to reduce the output of greenhouse and other associated gases from motor vehicles if their targets for climate change are to be met. When I asked a question at the last Treasury questions, the Economic Secretary responded by talking about improvements in air quality, which I accept have occurred, but did not wish openly to acknowledge the fact that greenhouse gas emissions from the transport sector have been rising substantially. Government measures have been inadequate in dealing with those issues.
	In the same context, I draw the House's attention to the table that goes with clause 7, which deals with the Government's proposals on vehicle excise duty. Ministers have trumpeted the success of the proposals to lower the level of vehicle excise duty for cars with low CO 2 emissions. Picking up on the point made by my hon. Friend the Member for Sevenoaks (Mr. Fallon), the Government have provided no analysis whatsoever of the real-world sales effect of those proposals in terms of the differentials in vehicle excise duty. I am surprised that a Government who have rightly put climate change at the top of their agenda have been so unimaginative and lacking in boldness in terms of looking again at whether their proposed structure for vehicle excise duty rates is the right one to achieve a greater and quicker uptake of vehicles with low CO 2 emissions. Why, for example, is not there a nil rate band for hydrogen-powered cars? Prototypes of those have been tried in the United States; where is the encouragement to bring them into the United Kingdom? Where is the substantial discount for petrol and diesel equivalents for mixed electric and hydrocarbon-powered vehicles? The Bill lacks boldness. If the Government do not address that, they will continue to underperform against their own targets in relation to the Kyoto priorities. I say that as the Chair of the Select Committee on Environment, Food and Rural Affairs, which recently produced a report on the Government's performance in that respect. There is some suggestion that even meeting the Kyoto targets could be in doubt.
	Let me move on to air transport. The Bill contains nothing to deal with emissions from aircraft. There is one thing that the Government could have done in relation to aircraft, motor vehicles and any other sources of emissions. As the Chief Secretary and the Financial Secretary are aware, the Government have at their disposal the use of capital allowances, and if they had wanted to accelerate still further the pace of the introduction of more environmentally-friendly systems, they could have introduced an enhanced rate of capital write-down. As you will know, Mr. Deputy Speaker, from your experience of Stansted in your constituency, there is a need to introduce the most modern aircraft as quickly as possible. They pollute less with noise and are more efficient in terms of fuel, yet the Government are silent on providing any mechanism to enhance the write-down rate for aircraft to encourage the uptake of more modern air vehicles. The same principle could be applied right across industry to try to add some carrots to the sticks on which the Government's environmental policy relies.
	The Bill moves on to invite us to confirm the rates of income tax. Following the interesting observations of my right hon. Friend the Member for Charnwood (Mr. Dorrell), I want to pose a question to Ministers: can they give an unequivocal guarantee that the 10 per cent. starting rate for tax that is confirmed in the Bill would, if Labour were re-elected, remain for the duration of the next Parliament? I would be interested to know whether that structural configuration of the tax rates remains part of Treasury thinking.
	My right hon. Friend the Member for Charnwood rightly drew the House's attention to the work undertaken by the Institute for Fiscal Studies. He could have focused on another factor that affected the institute's findings—the rise in council tax. That is the ultimate stealth tax, which the Government do not overtly increase except by starving local authorities of the necessary resources to meet the mounting costs of the responsibilities that the Government keep putting on them.
	When the right hon. Member for Blackburn (Mr. Straw) was a Treasury Front Bencher in opposition, he and subsequent Opposition spokesmen used to ask the Government of the day this awkward question—what is the impact on incomes by decile of all tax changes, both direct and indirect? That was sometimes an embarrassing question to have to answer when we were in government because the news was not always good. It is interesting that when that difficult-to-answer question was first posed to the incoming Labour Government, they refused to answer it, saying that the assumptions did not make for a meaningful answer. The latest findings by the IFS have brought that particular pigeon home to roost, because they provide us with the answer that
	"average . . . household incomes after tax and benefit payments fell by 0.2 per cent. in real terms between 2002/03 and 2003/04".
	That was, it says,
	"the first decline in any single year since the early 1990s."
	What a record for the Government to take into the general election. They are able to boast that since the 1990s—the period when they were always criticising theConservative Government for their economic performance—they have managed to create the first fall in average household incomes.

Michael Jack: Not only is it wrong; it also shows blind ignorance of the national insurance class 2 and class 4 payments that self-employed people make. I am surprised that a former Chief Secretary to the Treasury should make such a glaring error, which perhaps underscores a lack of real understanding of what is going on in the economy. That should make people seriously question the credibility of Labour policies as they affect businesses in this country.
	Table C5 of the Red Book should be required reading for anybody who wants to see the unexpurgated version of Labour's tax proposals. In the current financial year, current receipts account for 39.3 per cent. of gross domestic product. This Government project that that figure will have risen to 40.6 per cent. by the time that the next Parliament comes to an end, so by their own admission the tax burden is rising. The point is illustrated in visual form in chart C3 of the Red Book, which, interestingly, shows that tax as a percentage of GDP fell in 1994–95. But like a ski-jump in reverse, it has risen and continued to rise under this Government.
	I have remarked on many occasions about my disappointment with the Government's level of fiscal encouragement for biofuels. I draw Ministers' attention to a parliamentary answer to me from the Department for Environment, Food and Rural Affairs, which confirmed the dearth of a UK biofuels industry. So far as I can see, the only plant currently manufacturing biodiesel—it uses animal fats as a feedstock, rather than oilseed rape—opened this February in Motherwell. The rest of the plants are under construction and have projected modest production levels. The exception is a UK bioethanol plant, for which a planning decision is pending.
	If the Government can give a 40p duty discount for liquefied petroleum gas, they should look again at the duty derogation on biofuels and make a real effort to get the industry moving. If they really want to meet their inclusion targets under the European directive and help us to meet our greenhouse gas emission targets, they must, by definition, have UK-manufactured biofuels. The lack of such biofuels is a notable omission.
	Clause 86 deals with double taxation relief. The Chartered Institute of Taxation is concerned about this clause, and I hope that the Financial Secretary is on "receive" mode as I point out to him the following observation on the construct of the clause, which the CIOT made in the briefing helpfully sent to Members before the debate started:
	"What this potentially means is that legislation could have a far wider impact than is suggested by the guidance"—
	the notes on clauses to the original Finance Bill—
	"imposing significant restrictions on the foreign tax credit relief available to most UK companies owning foreign subsidiaries and investments."
	I hope that Ministers will deal with that point in the wind-ups, because it is clear that the CIOT feels that in effect, this clause could adversely impact on every company in this country with overseas interests.
	I conclude with a brief comment on a tax that I wish had gone up by more, and with some observations on inheritance tax. The increase in landfill tax for which clause 99 provides is not sufficient rapidly to progress the Government's agenda of meeting their European recycling criteria. Although the three-year indexation proposal for inheritance tax is welcome, because of the increase in house prices it will not be welcomed by the many thousands of owners of estates. These are people of modest income and whose lifestyle is also modest, yet they will be sucked into paying inheritance tax. It amazes me that a socialist Government can allow a tax that people of means can avoid paying some or all of by buying in the professional advice that they need, but which those of modest means, or none, end up paying. Is it not about time that the Treasury re-examined the entire structure of inheritance tax? This industry of avoidance is complex and expensive. It benefits only those who can afford the advice, and it does not help those who are innocently caught up in the house price spiral.
	For all the Treasury's pontificating about the number of estates that escape inheritance tax, the number paying it has increased. In 1998–99, 6,295 estates in the £300,000 bracket paid inheritance tax, but according to the figures for 2001–2, which were updated in July 2004, the number doing so had risen to 9,661. The tide is running and the wave is getting bigger. It is time for this Government to address some of the iniquities caused by inheritance tax.
	We shall have the opportunity during this general election to debate all these matters, but there is no doubt that people are learning exactly what a tax-and-spend Government are all about.

Quentin Davies: I remind the House of my interest as declared in the register.
	There are a number of things that need to be said about this Finance Bill, but the overwhelmingly most immediate and important needs to be said strongly and several times, and I therefore make no apology for following on from the excellent speech on this subject bymy hon. Friend the Member for Sevenoaks (Mr. Fallon). The point is that we simply should not be legislating in this fashion in this House—indeed, it is a complete disgrace—and least of all should we be doing so in respect of a Finance Bill, which goes to the heart of the relationship between the legislature and the people whom we represent. We are talking about the process through which we take away their money and property. Of course, it was around the issues of how that could be achieved fairly that Parliament emerged from the constitutional conflicts of the 17th century.
	We are now being asked to take a view on a Bill of 106 clauses, yet they have been available for scrutiny only for a few hours. They have been abstracted from another Bill that was printed last week. A few hours is far too short a time to examine the difference between the earlier Bill and the Bill that is now before us. How can we take a view of the merits of the Bill on that basis? Serious scrutiny cannot take place and the tragedy is that no one expects Parliament to do a serious job. That is the extremely sad position that we have reached in this country.
	All that is part of the erosion of Parliament's role—not just in the matter of Finance Bills, but more generally—as a result of the bad habits that the Executive have picked up steadily over the years. I admit that there were traces of it during the period of the previous Conservative Administration, but it has become infinitely worse over the last eight years. Parliament just provides a rubber stamp—it has become part of the ceremonial and decorative part of the constitution. Decisions are taken in No. 10 or Whitehall and it is assumed that Parliament will do what it is told within whatever time scale the Executive are gracious enough to grant. Whether it is convenient for the Executive branch to allow us four hours, two and a half hours or two and a half minutes does not really matter. Our role in legislation is no longer taken seriously—[Interruption.] I am not exaggerating at all. That is precisely the situation in which we find ourselves this afternoon.
	It has been a convention for generations that, if a general election is called and a Finance Bill is pending after a Budget, Parliament allows the Executive branch some emergency powers required to keep the revenue of the state flowing during that period. That is the convention and, as recently as 1992, when the position arose under a Conservative Administration, the Conservative Government lived up to that principle and brought before Parliament only the minimal Bill necessary to ensure that the Government could go on functioning during the subsequent month or so before a proper Finance Bill could be introduced in the next Parliament. That principle has now been discarded and thrown in the waste paper basket.
	The Government have introduced a Bill containing many complex and technical provisions and some new ones. As my hon. Friend the Member for Sevenoaks said, in a way, it does not really matter whether those provisions have been consulted on with the relevant professional bodies. I am glad, of course, that the Government consult in a formalised way but, unfortunately, they tend to consult only on matters that they feel it is convenient for them to consult on. The consultation system is good, but it is in no way a substitute for proper parliamentary scrutiny.
	In that light, what we are doing here this afternoon is not that serious. I would not like to describe a parliamentary procedure as a farce, but we are moving down that road. We have not had the time to do the necessary homework and, on this occasion, we have not been physically able to consult all those affected by the Finance Bill or all those who have views on it. That is simply unacceptable.
	I am sure that it will soon change, but at the moment, Conservative Members are a small minority in the House. The Government have an overriding majority and believe that they can get away with anything. That is an unhealthy position from which the democratic process in this country has suffered too long. I would like to appeal to the democratic consciences of Labour Members. I know that many of them do have consciences about these matters and the fact that they are in a position of enormous power with such a great majority should make them very reticent about abusing that power. That, however, is what they have been doing in many contexts and they are certainly doing it this afternoon.
	Labour Members should reflect on how far the process will go. What would happen if there were another Labour Government or, God forbid, a Labour Government for another eight years? Where would we find ourselves eight years further down the line when we know that we have already moved from a position where a Government tentatively introduce a minimalist Finance Bill to ensure the continued flow of Government expenditure to one in which the Government feel that they can get away with bringing 106 clauses before the House with four hours to debate them? If we extrapolate from that process, where will we find ourselves eight years later? We might be debating an entire Finance Bill in 10 minutes with no warning at all. In other words, our parliamentary procedures would have become a complete travesty. That is why I invite Government Members to reflect on these matters much more seriously than they have so far.
	That is far and away the most important point that I want to make about the Bill, but I have attempted to examine this new Bill as conscientiously as I can in such a limited amount of time and I have noticed some problematic aspects. I have noted the tendency—it started under Conservative Governments but has got steadily worse under the present Government—to use the negative procedure and legislate by order or statutory instrument. More and more taxes find themselves on the statute book on that basis. The Government are giving themselves a blank cheque and we all know how thoroughly inadequate statutory instrument procedure is for examining legislative proposals. We all know that hon. Members turn up for such Committees without any preparation, often not even understanding what issues are at stake. They have no opportunity to amend the orders, so why should they make the effort to understand them? There is little that they can do, which is demoralising and demotivating in itself.
	I shall use one particular example to bring the matter home. Let us examine clause 102, which deals with the Pension Protection Fund. It states:
	"The Treasury may by regulations make provision for and in connection with the application of the relevant taxes in relation to—"
	and it then refers to various pension protection funds. The relevant taxes are subsequently defined in subsection (3) as income tax, capital gains tax, corporation tax, inheritance tax, value added tax and stamp duty land tax—virtually every major tax. Thus the funds will be taxed by the Government in a way that we cannot predict and whenever they want to do it. They will simply write their own tax laws, which is wholly unsatisfactory.
	The Committee considering Finance Bills always faces that difficulty and it is getting progressively worse every year. What is more, the Government are not in the least ashamed to proceed in that manner. Instead of producing a minimalist, emergency Bill to deal with the electoral period, the Government have introduced this 106-clause Finance Bill.
	I have to say that clause 102, which I have already cited, is a less than honest provision. It starts in the way that I have already described and continues with a number of subsections. Being conscientious, I felt that I should read them. When I did, I found that the subsequent subsections in no way constrict the right given to the Government to make whatever tax laws they want for these funds by regulation. They merely state that the power "includes" this or that. For example, subsection (2) states:
	"The provision that may be made by regulations includes provision imposing any of the relevant taxes".
	Subsection (4) states:
	"The regulations may, in particular, include",
	and subsection (5) states:
	"The exemptions and reliefs that may be given by the regulations include".
	Subsection (6) states:
	"The regulations may make provision in relation to any time after 5th April".
	Clearly, what might seem at first glance to be defining subsections are, in fact, tautologous and unnecessary. They say what the regulations may include, but the provisions are unnecessary because the Government's power to write whatever tax laws they want for these particular funds is already granted in subsection (1).
	I draw two conclusions from that. First, the Bill contains a lot of unnecessary verbiage. Finance Bills are always much too long and complex, but there was no need to encumber this Bill with such unnecessary wording. Secondly, there is no intention to make the Bill clear or transparent so that taxpayers can know what the rules are. I can assume only that 90 per cent. of the clause to which I have referred is intended to be obfuscatory. Civil servants and parliamentary draftsman have spent hours and days producing what is completely unnecessary rubbish. The powers granted to the Government require only the first sentence of the clause.
	That is another but more minor illustration of the direction that tax law is taking in this country. It is a very bad tendency.
	Of course, we know that this Bill is designed to hide the nasty truth of what will happen if there is a new Labour Government. My hon. Friend the Member for Tatton (Mr. Osborne) and all the independent commentators have made it clear that the Government's fiscal policy is out of control and that there is a structural deficit. The Government will have to increase tax revenues and the only question is how they go about it.
	Moreover, the Government have a record of promising before elections that they will not increase taxes and then of breaking those promises. At Prime Minister's questions, it was notable that the Prime Minister avoided responding to that accusation and tried to talk about something else. He knows that the accusation is all too true.
	There is great concern in the country about the Government's secret tax-raising plans. I hope that we will be able to draw them out on these matters during the election campaign. That is very important and it is better to get an untrue declaration or statement from the Government than nothing at all.
	In the interests of an honest election campaign, we should ensure that we ask the right questions. For example, the newspapers have reported considerable concern that the Government have a secret plan to extend capital gains tax to owner-occupied property. That would be a devastating blow to millions of home owners and an economically stupid mistake. It would place an enormous cost on labour mobility, which is an essential part of a successful economy. The labour force is our most important resource and it must be used efficiently. People must be able to move from one part of the country to another to take up new jobs or promotions. They will not do so if that incurs a tax penalty and the economy will suffer enormously.
	Another suggestion is that the Government will increase national insurance contributions. We all know that they long ago abandoned the idea that national insurance was anything other than a tax. The Chancellor has increased contributions, contradicting undertakings given before the last election, but without making a corresponding change in benefits. The Government have abandoned the idea that the national insurance fund has any authentic status. They like to work by stealth and dislike being straightforward. They have never said openly that national insurance is a tax and that the fund is merely a fiction, a bogus concept that does not really exist, but it would have been more honest of them to do so.
	The Government will try to bamboozle people by raising national insurance contributions and pretend that that is different from increasing income tax. In fact, the only difference is that higher national insurance contributions have no corresponding reliefs. Raising national insurance contributions would be an enormous mistake. The Government think that they got away with it last time and there is no doubt that they will be tempted down that road again if they are returned to power.
	It is very important that we expose the Government's record on this matter during the election campaign. We must also make clear the great risks that the country will face if there is a Labour Government after 5 May.
	I turn now to pensions. Several Opposition Members have mentioned the enormous damage that has been done to our pensions industry and I spoke on that subject in the Budget debate a few weeks ago. It may be a cliché to say that our pensions system was the envy of the world but, with the exception of the Netherlands, where the system is very similar, all our EU partners used to envy it.
	Ironically, in their first few years in office, the Government used to tell our EU partners that they should set up a funded pension system like ours. Until 1997, the system was successful, but that is no longer true. Not one defined benefit pension scheme has been created since this Government came to power. About one third of such schemes have been closed down in that time and another third have been closed to new entrants. That devastating attack on the security of retired people and on the prospects for succeeding generations is due entirely to this Government's policy.
	I do not accept that what happened was the inevitable result of rising life expectancy or of the 1998 stock market fall. There have been much more serious crashes in the past 50 years, including the devastating collapse in 1974 and 1975 and the small falls in the early 1980s and early 1990s. Moreover, the increase in life expectancy has been steady—[Interruption.]
	I see that the Chief Secretary is leaving the Chamber. I thought for a moment that he was going to defend himself against my complaints, but like the Prime Minister earlier he has no defence. I suppose he is leaving out of shame at the exposure of the record of the Government that he has represented. Whether he goes to South Africa or not, he will have a more comfortable time than has been his experience in trying to defend the Government's fiscal record.
	The damage done to our pensions system has caused people to worry that the Government will come back for a second bite, like a shark that bites off a person's leg having previously bitten off his arm.

Quentin Davies: Not unnaturally, there is great concern that, if we are unlucky enough to have another Labour Government, the Treasury might be planning to tax the so far tax-free lump sum. Another worry is that there is a plan to reduce the level of tax relief for pension contributions up to the new global limit, moving away from an individual's marginal rate of tax to the standard rate of 22 per cent.
	Either of those moves would be devastating to the incentive to save and to contribute to a pension scheme and would automatically and immediately result in a further reduction in our already extremely low savings ratio. That would be in conflict with what the Government say about their apparent attachment to improving the savings ratio and increasing the provision people make for their retirement. I fear that the Government will find themselves in a contradictory situation with fiscal policy collapsing. They have been overspending and the only ways to avoid increasing taxes if they return to power would be to revise the spending plans that they are selling to the electorate substantially downwards or to abandon the golden rule, and they would then not be committed to the principle that enshrines considerable fiscal stability and prudence. The Chancellor talks as though the growth of the economy will bail him out, but his projection is that economic growth will be permanently above the trend rate or that the average rate of economic growth over time will be greater than the maximum rate of growth. That does not make sense.
	The Government will have to do something desperate unless they agree to adopt our suggestions for some sensible policy changes in the new deal and in asylum and immigration. The next Conservative Government will make some policy changes and save money on administration. The Labour Government's record is appalling. They cannot go a day without setting up a new quango or more bureaucracy. Every time they introduce a new initiative, we hear about a new quango—the latest one will cost £26 million or so to set up. That must stop.
	There are greater prospects for administrative savings than were identified in the Gershon review and many were identified in the James report. We have a well-thought-through and reasonable programme for policy changes and administrative savings that will lead to our being able to have £12 billion more available in the second financial year of the next Government than this Government would have on their projections. That will enable us to cut spending by £8 billion and reduce taxes by £4 billion. That will be a modest but significant step in the right direction. It will be the turnaround that this country badly needs.

Mark Prisk: I thought that Finance Bills might be behind me but the calibre of the speeches today has moved me to make a short contribution. I suspect that this will be the valedictory contribution from the Chief Secretary to the Treasury and I would be upset if I were unable to make at least a short contribution. Before I discuss the details of the Bill before us and of the Bill that should have been before us I want to add my personal congratulations to him, although his appointment is dependent on other matters. He has made unique, sometimes theatrical and often charming contributions to our debates in Committee and in the Chamber. I wish him well.
	My right hon. and hon. Friends rightly highlighted one of the most important points of our deliberations—the quality of the scrutiny that the House can undertake. I am still a relatively new Member, having been elected four years ago, and I still believe that it is important to allow for debate and preparation of our thoughts. We have been given just four hours to consider 106 clauses, 11 schedules and, as my hon. Friend the Member for Sevenoaks (Mr. Fallon) rightly highlighted, 203 pages of primary legislation. That is unacceptable. Time for debate is crucial to allow us not, as Ministers may suggest, to needlessly drag the matter out but to probe the what-if questions. That is the point of parliamentary debate. The essence of parliamentary discussion is to identify what Ministers and their advisers may not have anticipated and to use that process to ensure that at the end of our deliberations the legislation is better than when it came before us. That is important.
	A second aspect of the quality of scrutiny is preparation time. I hoped to have the opportunity last night to consider the Bill in detail and to compare it with the main Bill, but that was not open to me. I inquired at the Vote Office but the Bill was not available. The Prime Minister's decision to go to the country a year before he needs to has made it necessary to have this debate today. Hon. Members will be restricted in their ability to contribute to the debate in a thoughtful and considered way so one of our functions—to listen to outside experts and to draw on that expertise to better inform the legislation—has been removed.
	In the few hours available to them some of my right hon. and hon. Friends have been able to inquire into the concerns of experts in the tax, accountancy and legal professions, but the chances of amending the Bill or debating the benefits of amendments have been negated because we do not have that opportunity. I have contributed to the consideration of two Finance Bills during the past two years and that outside expertise enabled sensible and often non-partisan discussions to improve the legislation. I am disappointed with the Government and that will reflect on them as the legislation is passed later today.
	Having put those concerns on the record, I want to turn to more specific matters. I suspect that right hon. and hon. Members will be not entirely surprised that I want to talk about stamp duty land tax. There is undoubtedly something to welcome in the change in the threshold from £60,000 to £120,000 and it would be remiss of me not to recognise that as a positive step forward. It was interesting that the Chief Secretary was unable to identify or confirm the number of households in his constituency that would benefit, although he said that the Financial Secretary would do that for him. In my constituency, which is not a million miles away from the leafy suburbs of Brent, the reality is that less than 3 per cent. of first-time buyers would be able to benefit from the change. That means that the hopes of 97 per cent. for some positive change from the Government have been dashed.
	When one considers the total revenue that the Government plan to receive in the coming year, one discovers the reality of the situation. It is not, as one might have gathered from listening to the Chancellor, a benevolent reduction in the tax burden: quite the contrary. If one looks at the Red Book—the Government's own figures—it shows that they anticipate a 9 per cent. increase in the total stamp duty land tax revenue. It would rise from £8.9 billion to £9.7 billion. That 9 per cent. rise is a significant increase in the tax burden.
	Experts in the house-buying market do not anticipate that house prices will rise by more than 4 or 5 per cent. in the coming year, so where does that 9 per cent. additional total revenue come from? It may be argued that it will come from the changes in disadvantaged area relief, although those are relatively small figures. What worries me, and it relates to an excellent point made by my hon. Friend the Member for Sevenoaks, is that we have no genuinely independent audit on which we can base our assessment as to whether the total burden of individual taxes is correctly estimated. We see a figure in the Red Book and we have to assume that it is correct. It may be correct, but the problem is that we have no means by which to judge that. I hope that the Financial Secretary will address that concern.
	Although the Chancellor has taken a minuscule step forward in increasing the threshold to £120,000, he has missed a great opportunity and I shall explain why that is so. The tax is regressive and unfair. It is not, as in income tax, based on the margins of income; rather, it has what is known as a slab effect. Thus, under the Government's proposals, if one bought a home for £119,999, there would be no stamp duty land tax to pay—not a penny. However, pay a pound more for that house and the tax will be £1,200. That is because the tax rate applies to the whole price, not just the margin. The effect is repeated at the £250,000 threshold. At £249,999, the tax is 1 per cent., but at £250,000 the tax bill trebles, rising from £2,490 to a massive £7,500—a trebling of the tax bill for a £1 price change.
	What is wrong with that? First, it is unfair. Secondly, and I hope that the Financial Secretary will address this point as I understand that it is his direct ministerial responsibility, it distorts the house price market. If someone knows that at £250,000 there will be a trebling of their tax bill, it cannot be beyond the wit of the civil service to realise that they will attempt to avoid the price of the house or flat rising to £250,000. I would not necessarily condone or agree with individuals who took such decisions, but they will occur.
	The Government's answer was to put in a whole raft of bureaucratic and complex administrative procedures to try to clamp down on the problem, whereas they should have had the temerity and courage to reform the tax and remove the anomaly at source, thereby removing the need for any form of avoidance activity. On numerous occasions, the Opposition have pressed that point on the Government but, sadly, they have been deaf to reason.
	The problem is repeated not just at £250,000, but also at £500,000. The Government's tax policies are encouraging tax avoidance. In previous debates with Treasury Ministers, I have tried to understand with them exactly why the paperwork was growing. After all, under the old stamp duty, which had been in existence for 300 years, we could manage with just one piece of paper. Only a one-page form was required, yet under the apparent modernisation of stamp duty what do we have? Twelve pages of forms to fill in, with 43 pages of notes that try to explain them. What nonsense. Why are the Government so firmly set against reforming the tax and so determined to go down that bureaucratic route? It seems anomalous and I am afraid that most first-time buyers will decide that the Government are not interested in the problem and do not care. The Government simply want their 9 per cent. revenue increase and that is all that matters to them.
	I want to consider briefly the commercial aspects of stamp duty land tax and the removal of the relief for disadvantaged areas. I recall that we were told when debating the issue with Treasury Ministers that this crucial relief would bring hope and joy to the many urban deprived areas and that it was something that the Chancellor felt passionately about—so he got rid of it, and he did so because he needed somehow to find the money to pay for the tiny increase from £60,000 to £120,000. Of course, he discovered that there was £340 million tucked down the back of the sofa, and he thought that he could use that without anyone noticing. Sadly, for him, they noticed.
	I shall correct the figures that the Chief Secretary identified. He said that there was a £90 million difference between the £340 million that the disadvantaged area tax relief changes bring into the Treasury and the £250 million that will go out because of the domestic change. However, another £20 million is tucked away in the Red Book in relation to dealing with tax avoidance. I hope that he will be able to clarify the total figure—I believe that it is about £105 million—by which the Chancellor is ahead.

Paul Boateng: Let me deal with this. I well remember our debate upstairs on stamp duty land tax. It was a good debate, and there was honest disagreement among hon. Members on both sides of the Committee about the desirability of those measures. We took the view that it was important to introduce the reform. We took the view that a potential could be realised given the contribution to regeneration of the assistance provided by the measures that we proposed. As I have said during my speech and as has been said in the debates on the Budget generally, we have reached the view that we can better focus the relief, and that is what we have done.
	On the figures, I appreciate the care that the hon. Gentleman takes with such matters. Table C8 of the Red Book shows that stamp duty receipts are projected to increase by about £0.8 billion as result of the forecast effect of the Budget measures from 2004–05 to 2005–06. That includes receipts from residential, commercial and, indeed, share transactions. Hon. Members who were upstairs in Committee at the time—it was a couple of years ago—will remember that we also discussed share transactions.
	The Treasury's best estimate is that there will be a £220 million reduction in receipts from residential property and a £580 million increase from commercial property, including the £340 million to which the hon. Gentleman refers in the Red Book that will arise from the measures that we have taken in the Budget and the Bill. Those estimates are approximate.
	The hon. Gentleman will know, too—indeed, as I said in my contribution and as he correctly identifies—that those figures are also based on the full package of Budget measures and the forecast effects. I simply say that for the purposes of clarity. He is quite right to point out—in no way do I intend to resile from it—that those sums come from the full package of measures. I hope that that clarifies the situation.

Mark Prisk: That is super. Given the £90 million balance between the two sums and the additional £20 million that relates to tax avoidance, the Chancellor is obviously ahead by about £110 million in revenues because of the various changes. That is an important point to get on to the record.
	To return to the principle of the disadvantage tax relief on commercial sites, my instinct and personal preference would be to have fewer little tinkering reliefs. If we had clearer, simpler, lower taxes, we would all be better off. I suspect that we can have that philosophical debate on another occasion. I am not personally wedded to the longevity of that relief. However, given the way that the Chancellor tinkers with such things every year, my concern, as ever, is that companies are put off engaging in the changes in their activity that the Government seek to encourage simply because they do not believe that the reliefs will be around next year, so why should they bother to go through the paperwork and so on? That is a very important point to make in terms of the way in which taxation has been dealt with under this Government.
	I always hear from Labour Members how they are not willing to lecture us, but I remember the occasion when they were happy to regale us—indeed, they lectured us—with the fact that they passionately believe in consultation before making changes. Where was the consultation on this? It was done overnight. The Minister may refer to confidentiality and the fact that the Government must not allow anyone to take advantage, but a point of fairness is involved. The large property companies have lawyers and advisers who are able to move quickly. I appreciate that the concept of a lawyer moving quickly is perhaps a strange one, but that is what lawyers have been able to do on this occasion. Given that the provision is about disadvantaged areas, my worry is that small companies—the small fry, the family businesses and the enterprises that were considering the proposal—do not have such resources immediately available to them. They are not able to adjust their arrangements accordingly. The way in which the reliefs are offered, taken away and adjusted, tinkered and meddled with is significantly to the disadvantage of small firms. In principle, it is bad taxation policy.
	That leads me on to several other thoughts about smaller enterprises and how the Bill and its larger brother might affect them. The first relates to clause 13 on the charmingly termed "non-corporate distribution rate for small companies". I am told by the Bill that it will remain at 19 per cent. That phrase is far from being as innocent as it appears. It masks a history in which a tax was once promoted by the Paymaster General. Sadly, she is not with us today, but she told us that small businesses should consider the change that the Government were making to try to reduce their tax burden to 0 per cent. It was a gift horse that small businesses should not look in mouth. I forget the exact words, but the point was the same. However, two years later, when the Government discovered that the number of corporates being created was far in excess of what they anticipated and that the poor, old Chancellor was losing money faster than he expected, they needed to change it. Businesses that were previously encouraged to take up the provision—such was the Government's benevolence—were suddenly told that it was wicked and shameful behaviour. It was a form of tax avoidance on which they needed to clamp down. None the less, it was the same policy.
	This constant attempt to rotate policies—to try something and, if it does not work, to adjust it—seriously damages small businesses. Sadly, and all too often, the Government do not understand the distinction between a "firm" and a "company", but they have encouraged many firms to become incorporated because that is how the firms thought that they were meant to arrange their affairs. They do that to keep their tax bills at a reasonable level, but they are then told that that is wicked and nasty. They are nasty tax avoiders who must be clamped down on.
	Such behaviour by the Government makes most entrepreneurs say, "Forget it. I'll give up setting up my next business to create the next set of jobs and the next tranche of wealth and I'll go and enjoy my villa in Portugal. I wasn't planning to go there now, but I will do so because I'm fed up with the way that the Government treat things." That is one aspect of the way in which the Government deal with small businesses.
	The last aspect of the Bill to which I wish to refer is an omission as much as anything else. I refer to the way in which the self-employed—not companies—are dealt with. Earlier, I mentioned the Chancellor of the Duchy of Lancaster. When trying to explain away the awkward figures on the fall in certain incomes, he said that they were irrelevant because they had been skewed by the self-employed, who were less relevant to the central question.
	The Chancellor of the Duchy of Lancaster said that the incomes of the self-employed were entirely global, and I appreciate that he was self-employed for only a short time when he was able to spend more time with his family. For those of us who were self-employed for 10 or 11 years and who actually understand the principles behind the figures, the idea that the majority of the self-employed are globetrotting entrepreneurs who are on and off jets each and every hour is complete bunkum. That demonstrates both his economic ignorance and, frankly, the Government's unwillingness to understand the smallest of our entrepreneurs—the self-employed.
	I am disappointed that the Paymaster General is not in the Chamber because the classic example of that attitude is, of course, the infamous IR35. When the measure was introduced, we were told that it would deal with wicked practice and tax avoidance that should not take place. We were told that £400 million would come back to the UK Government that was rightly theirs. Here we are, two or three years later in 2005. When we make inquiries of the Inland Revenue to find out how many cases have been brought, we are told that the number is 200 or more. We then inquire how many of the cases have succeeded and how much of that £400 million revenue has actually come pouring through the doors of the Treasury. I am told that roughly two of the 200 cases have been successful, so 198 have failed.
	The frustrating aspect of the situation is that all the other self-employed souls who had to try to change their arrangements to comply with the legislation have suffered cost and a waste of their time only to find that the measure does not work. It has not brought in the revenue that we were told that it would and it has created a bureaucratic nightmare for the law-abiding majority who have tried to comply with it. The situation shows that, as is so often the case with the Government, they are all talk and no action.
	I have worries about this Bill and the Bill that we should have considered, but I have hopes for the Bill that I know that we will consider under a Conservative Government in just a few weeks. The Bill is ill considered and has been poorly drafted in a rush with little care, consideration or consultation, but that is typical of the Government. It is frankly incomplete.

Mark Francois: Before my hon. Friend concludes what has been a good speech, may I take him back briefly to stamp duty land tax, on which he is not a pedant, but most certainly an expert? Did he notice the article that appeared in The Independent on the morning immediately after the Budget that mocked the Chancellor for effectively presenting the measure to reduce the relief for disadvantaged areas as a productivity measure? The article said that even this Chancellor of the Exchequer could not argue that that tax increase was actually a productivity measure? Does my hon. Friend have any sympathy with that sentiment?

Andrew Tyrie: Those are two interesting options, and we can all make up our own minds.
	Despite the fact that no Labour Back Bencher has been present, we have not been short of interesting contributions by Opposition Members. We had an interesting speech by my right hon. Friend the Member for Charnwood (Mr. Dorrell), who mentioned the Institute for Fiscal Studies study. He made the relevant point that for the first time since the early 1990s, real disposable incomes have fallen. That is because of the increases in taxation pushed through by the Chancellor since 2001, despite promises not to do so.
	My right hon. Friend also correctly alluded to the distributional effects of freezing personal allowances, also mentioned by the IFS. As a result, 7.5 million more taxpayers are paying tax at a higher marginal rate than they would have done had allowances been indexed. That is a crucial point. Of course, the tax burden is going up and up, and it will carry on doing so. Labour used to try to conceal that in the Red Book. Now, the graph just shows the upward trend, which can be found on page 255.
	My hon. Friend the Member for Sevenoaks (Mr.   Fallon) made an important point about how Finance Bills are inadequately scrutinised. I completely agree. He is a member of the Treasury Committee. This is not the appropriate time to expand on this, but the Select Committee should play a much larger role in the scrutiny of Finance Bills. We should come to this place and debate what needs to be done on the basis of detailed scrutiny produced by the Committee before we go through the Bill clause by clause. We have moved in the opposite direction today, and there has been virtually no time to prepare for adequate scrutiny.
	My right hon. Friend the Member for Fylde (Mr. Jack) also made some very important points, in a typically engaging and lucid speech. He mentioned ISAs and the extent to which the Government have eroded the attractiveness of the incentive to save throughout the tax system. Of course, that is only one of the causes of the fall in the savings ratio. There are a number of others. Financial scandals have not helped, especially Equitable Life. The Government have done their best to sweep that under the carpet and to avoid paying compensation for it.
	Another cause of the fall in the savings ratio is the fall in stock market, but that is not separate from the fiscal concerns, because of course one of the causes of the stock market falls was the Government's £5 billion raid on pension funds. When £5 billion is taken from pension funds, what is the effect on share prices? Answer: all things being equal, share prices fall. Therefore the origin of the market fall, often described as a separate cause of the fall in the ratio, lies partly with the Chancellor of the Exchequer.
	My right hon. Friend also commented on the fact that the Government have not produced an estimate of the effects on carbon emissions of changing the structure of VED rates. He also talked about biofuels, on which he is an expert—indeed, he is the leading expert on that subject in the House of Commons, a result of his time as a Treasury Minister and a Select Committee Chairman.
	My right hon. Friend described the effect on taxpayers of successive Budgets in a pertinent phrase, "the pinch has come on the mass of taxpayers". He is quite right. That pinch has taken some time to come on, for reasons that he and others have explored. The savings ratio has roughly halved, although that is a net figure. The other side of that ratio is the increase in borrowing—people increased their borrowing to maintain their spending, which delayed the onset of the pinch. Now, they are finally beginning to think about how to pay back that borrowing, so the pinch really is coming on. The two points that my right hon. Friend made at the beginning and the end of his speech are therefore closely connected. He also made some excellent points about inheritance tax. I shall not repeat them, but they were important and powerful points.
	My hon. Friend the Member for Grantham and Stamford (Mr. Davies) made a characteristically erudite and forceful speech in which he drew attention to the shoddy nature of some of the Finance Bills that we have been expected to consider. When I picked up the Bill this morning, it was described to me by the man who passed it to me from the Table Office, not as the Finance Bill or even as the revised Finance Bill, but as the draft Finance Bill. I replied that as I had to try to speak to it this afternoon, I wanted the final version. It is pretty disgraceful that we have to scrutinise legislation in such a fashion. My hon. Friend made several other trenchant points, not least about the damage done to the pensions industry in recent years and the reasons why final salary schemes have got into difficulties. One of the main reasons is, of course, Government policy.
	My hon. Friend the Member for Hertford and Stortford (Mr. Prisk) correctly pointed out that we saw the revised Bill only this morning. He also alluded to the importance of listening to experts before we attempt to scrutinise a Bill in detail. A key part of the Finance Bill process is that we are able to draw on the considered views of others. Presumably, they too have been passed this bundle of papers on a Treasury tag and been told that it is a draft Bill. They are now expected to get their points across in the brief period available to us before the debate ends—indeed, they have been trying to do so.
	Next, my hon. Friend talked about stamp duty, and when he talks about stamp duty, I listen. He knows a great deal about the subject. He correctly pointed out that the Government only want their money—the extra revenue—and are not really interested in making stamp duty work better or more effectively. As he said, every time the Government reform stamp duty, the paperwork burden seems to increase. That will almost certainly be the result of the latest proposed changes.
	The House and the country have grown accustomed to the way in which these things happen. The Chancellor announces a Budget, then a Finance Bill is introduced, which we discuss in the Chamber. We start with bluff and bluster. There is a firework display from the Chancellor on Budget day that no one can understand, but everyone thinks it sounds okay. We are thrown dozens of statistics in a wholly indigestible form, then we are expected to try to work out what is going on from a Red Book—I have the two most recent Red Books with me today—that increasingly owes more to party propaganda than to an explanation of economic developments in the country. Despite the Chancellor's best efforts to cover his tracks, in most years, although the Budget receives a good reception for a few days, it soon becomes a one-week wonder. The paint starts to peel off as people have an opportunity to study the detailed press releases. As soon as the Finance Bill is published and they have a chance to look at it carefully, they realise that a bit more paint deserves to come off.
	This year's Budget was not a one-week wonder, and not even a one-day wonder. It can best be described as a one-hour wonder, because it took only minutes to flip through the Red Book and discover, for example, that the £200 allowance for the over-65s to compensate them for a huge increase in council tax over the past eight years will be implemented for one year only. When the Chief Secretary was challenged on that very point in an interview on, I believe, Budget day, he said, "Well, all our measures are only for one year." [Interruption.] I do not have the transcript with me, but if he would like to deny that that was the purport of his remarks, I am happy to give him the opportunity to do so. He does not seem to want to do so. He effectively said, "Don't trust us to implement any of the later years stuff in the Red Book. It's all for one year only. Don't worry, it's not just the £200 that you can rely on us to implement for one year but everything." Perhaps he did not say so—he is welcome to deny it at the Dispatch Box.
	When that £200 in the Budget speech was announced, I was watching members of the Government carefully. The Secretary of State for Work and Pensions formed his fingers into the shape of a gun, which he pointed at the Conservatives, as if to fire a bullet. It made a good image for television for an hour or so—as I said, the Budget was a one-hour wonder—but by the evening the more alert broadcasters had removed it from their clips, because they realised that the £200 was available for one year only. A good number of pensioners in my constituency have already written to me, and like pensioners across the country, they have twigged that the £200 is for one year only. In the coming campaign, I shall make sure that every pensioner knows about that Labour measure. I will tell them that Labour has offered them £200, but that if the party is re-elected, they will lose it next year. It is a spectacular own goal from Labour. To put it another way, the Work and Pensions Secretary would have done much better to point that pistol at his own head.
	Nothing better illustrates what has been wrong with Labour over most of the past decade than that measure, which is designed to create a specific impression, and is public relations spin over substance. We have heard the same story on stamp relief—relief for disadvantaged areas will be ended while at the same time in the Budget speech there was a pretence that some extra relief will be given. There has also been a hidden raid on oil companies, and a good deal more.
	In a few weeks' time, we will present a Budget that can be trusted. We will publish a Red Book that can be understood, and we will ensure that the Office for National Statistics, made fully independent by an incoming Conservative Government, publishes figures on which we can all rely for the first time in almost a decade. We will use forecasts that have been put together independently of the Government, under the supervision of the Comptroller and Auditor General of the National Audit Office. I have argued for over a decade that we should move in that direction, and I am pleased that in a few weeks we shall have the opportunity to do so.
	It is high time that we ended the disgraceful gerrymandering of the statistics that has taken place. The fiddling on the private finance initiative, the attempt to reclassify working family tax credits and much else in the accounts was a scandal, and we ought to bring it to an end. When the tax revenues were pouring in, it did not matter so much, because the Government felt sure that they were well within their fiscal rules. Now the shoe is beginning to pinch. Now it looks as though every little bit is vital to enable the Government to meet their fiscal rules. That is where the Government will come under pressure in the next few weeks.
	At the heart of the Finance Bill is the issue of trust. Why should the electorate trust the Chancellor and the Prime Minister when they tell us that there will be no further tax rises after the election, should they win it? There are two overwhelming reasons why the electorate will not trust them. The first is that we have been there before. We have heard it all before. Before the 1997 election the Prime Minister said that he had no plans to raise taxes at all. What happened immediately afterwards? Tax rises for everybody. Then there was the 2001 pledge. The Prime Minister said words to the effect that it would be reasonable to conclude that national insurance contributions would not go up. What happened after the election? They went up. That is the first reason why the public will not trust what the Government are saying about the economy.
	The second reason has already been discussed extensively. The Financial Secretary did his best to handle the situation by plucking Goldman Sachs out of the hat, up against about 20 commentators, including the International Monetary Fund, which is extremely cautious about the statements that it produces. I know how the IMF operates, and I know that it checks its statements with the country's Finance Ministry before putting them out, and invites the Finance Ministry to challenge the detailed methodology that lies behind its calculations. Even the IMF concluded that there is a black hole in the accounts, which will have to be filled somehow. The Government's history shows that if they get the chance, they will fill it through higher taxation.
	The Government have consistently overestimated corporate tax revenues. The Institute for Fiscal Studies asked the right question the morning after the Budget when it said:
	"The key question confronting whoever is Chancellor after the election remains the same . . . is it plausible to expect the current budget balance to improve by 2.2 per cent. of national income . . . by 2009–10? . . .is it prudent to expect revenues to go up by £27 billion over the same 5-year period without fresh tax raising announcements?"
	That was the correct and crucial question. As I pointed out in the Budget debate, the IFS answered its own question. It said:
	"We think that to achieve these forecasts requires the Chancellor to raise taxes . . . by £11 billion a year."
	The Opposition are not in the forecasting business, and we do not intend to get into it, but we are listening to outside forecasters. They tell us there is a structural deficit—a black hole in the accounts. The choice for the electorate is clear. If people vote Labour, the black hole will be filled by higher taxes, but there is much more at stake than merely a tax rise.
	The Bill, even though I have not had a chance to read it properly—I do not think that any Opposition Member has, because we have had it for only a few hours—illustrates the bigger problem. Successive Finance Bills have ended up reducing wealth creation—complicated, difficult to understand, loading enforcement costs on a range of wealth creators in the country. I cannot do better than to end with the words of the Prime Minister's former chief economic adviser on exactly that point. [Interruption.] Someone shouts "Who?" across the Floor of the House, as if by doing so they can somehow expunge this fellow from history—a sort of latter-day painting-out of Trotsky from the photograph of those who did all the hard and dirty work in Nos. 10 and 11 these past days. I am referring to the former chief economic adviser to the Prime Minister, who said:
	"Britain's economic arteries are slowly being furred up by a higher and more complicated tax system, excessive regulation and . . . endless micro-management."
	I could not have put it better myself.

Stephen Timms: We have had an interesting debate and I am pleased to be able to respond to a number of the points that have been made.
	The key to this year's Budget is the remarkable stability that we have seen in the British economy since 1997. In the 18 years from 1979 to 1997, the UK had the least stable economy in the G7, with the single exception of Canada. Since 1997, the UK has had the most stable economy in the G7, bar none. That has been a remarkable transformation, benefiting every aspect of Britain's economy and of our society.
	National debt is down. Since 1997, no G7 country has had lower debts and deficits than we have had. Inflation since 1997 has been half on average what it was before. Interest rates and mortgage rates have been halved. Disposable income has grown faster than it did under the previous Government. Unemployment is the lowest that it has been for a generation and there are 2 million more people in work. Every week, another 125,000 men and women are finding new jobs, and an additional 50,000 new vacancies are being advertised.
	We have had 50 consecutive quarters of growth in the economy for the first time since quarterly records began.

Stephen Timms: I will not give way for a little while, because I must make some progress. I have been extremely generous to Conservative Members.
	The Bill provides much-needed help to children, pensioners and home buyers. The increase in the child element of the child tax credit means that the effective income tax rate for a family with two children earning £25,000 a year will be just 6 per cent. At £30,000 it will be 10 per cent., so it is a family tax cut that targets the hardworking low and middle-income families who will benefit from it most.
	The Bill includes important changes to remove the tax impediments to sharia-compliant Islamic finance products. Last year's Bill fixed a problem with the way in which stamp duty affected sharia-compliant mortgages. This year, the Bill extends the benefits of that change and alters the rules for income tax, corporation tax and capital gains tax to remove impediments to sharia-compliant saving and loan products. It is important that everyone in our society has access to financial services that meet their needs, so that everyone can be included and benefit fully from the strength of our economy.
	The measures in the Bill to simplify pensions taxation will provide more flexibility and choice as people plan for retirement. They will help employers and pension providers, and they have received very wide support from pensions providers, employers, and individual pension savers. The assurance that people will receive a meaningful proportion of their pension saving in the event of their employer becoming insolvent provides an important boost to confidence in pension saving.
	I want to respond to a number of points raised in the debate. The hon. Member for Tatton (Mr. Osborne) helpfully explained to the House why the Opposition accepted the clauses in the Bill. He also mentioned representations on behalf of companies in the film industry. He spent a good deal of his time objecting to things that are not in the Bill, however, and I look forward to debating those matters with him after the election.
	The hon. Member for Twickenham (Dr. Cable) made several points with which I agree, but I did not agree with a number of his other points. He discussed his party's plans for local income tax. Under Liberal Democrat plans, a couple on average earnings with a combined income of £41,000 would see their income tax increase by £1,170, which, on average, would make them more than £260 worse off compared with council tax. Once people realise that if two people are working in a household, that household will have pay its local income tax twice, the apparent attractions of that proposal rapidly disappear.
	The hon. Member for Twickenham mentioned the pension credit. The Financial Services Authority has stated that pension credit means that
	"for most people, most of the time, it will pay to have saved."
	The pension credit has been extremely effective in addressing pensioner poverty, which was a big problem in 1997.

Mark Francois: I will make a few brief remarks on the clause, but before doing so I also want to refer to the Chief Secretary to the Treasury. I paid tribute to him when I wound up for the Opposition on the evening of Monday 21 March during the Budget debate, and the House will be pleased to hear that I do not propose to reprise all of that now. But I should point out briefly that the shadow Paymaster General, my hon. Friend the Member for Chichester (Mr. Tyrie), reminded the House a few minutes ago that a major power cut has taken place in south London today. To Paraphrase Lord Grey, the lights are going out all over Britain for this Labour Government, so the Chief Secretary—

Stephen Timms: The inflation increase in clause 1 maintains the high real price of cigarettes. The aim is to encourage people to smoke less or to quit, and to discourage children and young people from taking up the habit. The organisation Action on Smoking and Health has welcomed the proposal.
	The hon. Member for Rayleigh (Mr. Francois) is right to raise the issue of smuggling. The Government have acknowledged that that is a pressing and important problem, and we have taken effective action over an extended period to address it. As a result, tobacco smuggling is being contained. In the past four years, Customs and Excise has succeeded in halting the previous rapid growth in cigarette smuggling, and in reducing the market share for illicit cigarettes to the current level of 15 per cent. That is still too high, but it is significantly lower than previously.
	The total number of cigarettes smuggled into the UK each year has been reduced by more than 5 billion sticks, a fall of more than a third. In the same period, when cross-channel passenger smuggling was cut by more than three quarters, there has been a rise of 33 per cent. in legal cross-border shopping for alcohol and tobacco. That clearly shows that an effective balance has been struck between maintaining the rights and opportunities of shoppers and cracking down on smuggling.
	The hon. Member for Rayleigh mentioned hand-rolling tobacco specifically. As he will know, the Budget statement acknowledged explicitly that the pattern of smuggling for such tobacco is different, and made it clear that the Government are responding accordingly. I can reassure him that the very effective focus on tackling smuggling will be maintained through the forthcoming merger of the Customs and Excise and the Inland Revenue. I agree that it is important that that focus should not be lost, and assure him that it will not be.

Mark Francois: I heard what the Minister said, and do not wish to detain the House for long, given the present circumstances. He acknowledged the specific problem in relation to hand-rolling tobacco—and, on behalf of the industry, I thank him for that—but made no specific suggestions for further Government action to combat it, which will disappoint retailers around the country. With an election pending, it is only fair to warn him that we intend to do what we can to warn retailers that the Government do not take their concerns seriously.

Michael Jack: I make no apology for rising again to discuss biofuels for a moment or two. I acknowledge at the outset the Financial Secretary's helpful comments when he wound up on Second Reading. Although discussions are taking place on the obligations, the emergence in the United Kingdom of a biofuels manufacturing industry still seems to be some way off, notwithstanding the observation in box 7.3 of the Red Book which states that
	"Since 2002, 43 million litres of biodiesel have been sold."
	I acknowledge that there is an embryo sales industry, but there is an almost non-existent manufacturing source.
	I continue to be worried by the representations made to my Committee, the Select Committee on Environment, Food and Rural Affairs, that the current duty derogation rate is not of sufficient attraction to start an industry using UK-sourced oilseed rape as raw material. A parliamentary answer, to which I referred earlier, indicated that some manufacturing capacity was coming on stream, but not enough will come from UK sources to meet the target of 2.5 per cent. of biofuels included in hydrocarbon fuel sources that we must meet by 2006, and which rises to 6 per cent. in 2008. I apologise to the House if those figures and dates were slightly wrong; I do not have my detailed notes with me so I am speaking from memory.
	It is argued that if we increased the duty beyond the derogation rate of 20p a litre, the UK would attract overseas sources of supply. Indeed, I am certain that Brazil could supply all our bioethanol needs. That seems to dodge the issue, however. At a time when UK agriculture is going through a singularly important process of change, as it adapts to the revised common agricultural policy, I should have thought that Ministers would want to encourage home-grown sources, in both the bioethanol and biodiesel industries, so that UK agriculture could be involved. The Minister will be aware that British Sugar, which is pioneering work on bioethanol in the UK, has at least submitted a planning application for a plant, but only subject to the conclusion of discussions with the Government on some form of aid. The long and the short of it is that if we do not have duty derogation rates, or possibly capital allowances, of such an order as to get that embryo industry off the ground, we shall have to import our biofuels if the Government want to achieve the European targets for the incorporation of biofuels in the hydrocarbon fuel supply.
	It is illogical not to encourage that industry at the outset, because there are precedents. When the liquefied petroleum gas industry sought help, especially for investment in the necessary fuel station infrastructure, the Government provided a generous 40p per litre discount, which is gradually being unwound because the infrastructure has been established. One stage back, when we were moving from leaded to unleaded fuel, there was also a generous initial discount that was gradually unwound. I have not yet received a cogent explanation from the Treasury as to why, if we want to get our manufacturing industry off the ground, we are not being more generous in the first stages, so that economies of scale in biofuels production will eventually take over and enable the price to come down.
	In debate on a previous Finance Bill, I pointed out to the Treasury that they could have all that for nothing, simply through an obligation of inclusion. They could say that there will be 2.5 per cent. biofuel, with the balance of 97.5 per cent. being hydrocarbons, and that the price will be such and such. That would exactly mirror and match what happens under the renewable fuels obligation in electricity generation. So far, Treasury Ministers have shied away from that, although I think that the Energy Act 2004 contains such a provision to solve the biofuels conundrum.
	Ministers' colleagues in DEFRA show great enthusiasm and have even produced a beautiful, coloured booklet to tell us about the benefits of biofuels and the 5,000 jobs that will be created in rural Britain, yet sadly the Treasury is still camping on the ground that 20p is sufficient. However, the facts, as confirmed to me in a parliamentary answer from DEFRA, tell a different story. Will Treasury Ministers tell us when we shall actually get our UK biofuels industry?

Andrew Tyrie: This and the following clauses set the rates of corporation tax. In many ways, they are unexceptional. However, a number of issues are worth probing. The mainstream corporation tax rate of 30 per cent. has remained at that level for a long time. When it was brought down to that level, it was proudly boasted for a spell that it was the lowest in Europe. The small further fall took place after the main and very important reforms that were taken in the mid and late 1980s that transformed the tax and the corporate environment in the United Kingdom. Incidentally, those reforms were vigorously opposed by Labour Members.
	The current rate of 30 per cent. certainly is not the lowest in Europe. Ireland has a rate of 12.5 per cent., Germany is announcing plans to bring its rate below 30 per cent. and a good number of accession countries have extremely attractive rates that are well below 30 per cent. I am a little concerned that the Government do not appreciate that the UK's rate is beginning to look a bit high. In a few weeks, we will be on the other side of the Committee and will be able to sort that out and start pointing a way towards further reform of the tax. We have already outlined one or two suggestions. I am particularly concerned that the Government do not appear to have a clear view about where they want to take corporation tax. I would be grateful if they said something about that and the competitive environment.
	Another concern is that corporation tax is only one of a number of tax burdens on business that companies are expected to pay. Its yield constitutes only about a quarter of the total yield that comes from businesses, and that excludes pay-as-you-earn, national insurance contributions, salaries and VAT.
	Can the Financial Secretary say a little about the recent European Court of Justice decisions that are coming through? What is his estimate of the likely losses to the UK's yield from those decisions? It is an important issue that we will have to address when we are on the other side of the Committee, but I shall be interested to hear whether the Government have made an effort to think it through.

Paul Tyler: I am delighted to follow the hon. Member for Cannock Chase (Tony Wright) for two reasons. First, he speaks with great authority on this issue and has experience and eloquence that I cannot match. He has given much attention to the subject both in his Committee and elsewhere. Secondly, I agree with the concerns that he raised expressed. At this stage, it will not be possible in a matter of a few minutes to address them in the Bill, but I hope that what the Minister said about unfinished business in this respect will be held to when Parliament meets again after the general election.
	I and my colleagues in both Houses welcomed the opportunity of this Bill—an opportunity that I hope that we have used for constructive improvement. As the hon. Member for Huntingdon (Mr. Djanogly) said, the Bill has improved since the Government introduced it. One issue of principle is extremely important, particularly, but not exclusively, in relation to the issues raised by the hon. Member for Cannock Chase. His Select Committee, the Public Administration Committee, gave a great deal of attention to the issues that are now before us and were before us in Standing Committee. Yet, the cross-fertilisation of that detailed inquiry into inquiries was not treated with the serious attention that it deserved.
	As has been mentioned, the hon. Member for Cambridge (Mrs. Campbell) sought to introduce some major principles from that previous investigation by our Select Committee, which, after all, has a Government majority. As far as I recall, its recommendations were virtually unanimous, as the hon. Member for Cannock Chase may confirm. Yet the cross-fertilisation of that Select Committee work into a Standing Committee on the Bill simply did not take place.
	There are wider issues that go beyond this Bill. A great deal of the most important work in this House is now done in Select Committee. If we cannot at least guarantee a clear channel to a Standing Committee of information, instruction and guidance from Select Committee work specific to a Bill such as this, there is something wrong with one Committee or other, or with the communication between the two. I suggest that the problem lies in the Standing Committee.
	There is unfinished business, and not just in relation to role of the Lord Chief Justice. I agree with the point made by the hon. Member for Cannock Chase, but I suggest that the issue is more specifically about the parliamentary role. The Minister referred to that, but I do not find the reassurance that he gave us wholly adequate. I hope that there will be a return to the issue. Much careful thought was given in Select Committee and in the other House to how inquiries that touch on the conduct of Ministers could be effectively set up. That involved terms of reference and how the inquiries were to conduct themselves while taking note of the fact that there was a ministerial component.
	I regret that we have not made more progress on that matter. I have had experience of inquiries of various sorts, both statutory and non-statutory. To fail to address the problem and to have made so little progress on that thorny issue is unfortunate, given that we have only rare occasions on which legislation can improve such matters and that there may not be another such occasion for some years. As I said before, that is unfinished business. The integrity, independence and efficacy of inquiries is at stake if we do not get this right and it is unfortunate that we have not made more progress.
	I pay tribute to the work of the hon. Member for Cannock Chase and his Committee, as, indeed, the Minister did, but I think that it would have been even better if the words that we have all expressed had been reflected in action and if the Committee's recommendations had been taken to heart and put into the Bill.
	Question put and agreed to.
	Bill accordingly read the Third time, and passed, with amendments.

Paul Goodman: I listened to the Minister with care and I note that she said that the Government do not take depression lightly, which I am sure they do not. She also said that the Bill is not the end of the road, which I am sure it is not, and that, were the Government to be re-elected—I must add that that is extremely doubtful—they would consider the social model in detail. However, it is extremely regrettable that they are seeking to remove subsection (3), and I want briefly to explain why.
	As the Minister acknowledged and as the shadow Leader of the House, my hon. Friend the Member for North-East Hertfordshire (Mr. Heald), pointed out a moment ago, it is widely recognised that depression can recur. It is also widely recognised that spells of depression often last for not more than six months, which is how the six-month period was arrived at. So someone who had an episode of depression would not be covered under the 1995 Act, which, in essence, stipulates that the effect of an impairment is a long-term one that has lasted, or is likely to last, for at least 12 months. Of course, as we all acknowledge, people who have had depression are sometimes discriminated against by employers. Such people are often hesitant to disclose previous episodes of depression when making job applications. Indeed, they may be deterred from applying at all.
	The Joint Committee that considered the draft Bill, on which I served, recommended that people who experienced separate periods of depression totalling six months over a two-year period should be considered as meeting the long-term requirement. The Minister's colleague in the other place—Lord Carter, I believe—tabled an amendment to that effect, which the Government rejected. My noble Friend Lord Skelmersdale later tabled an amendment to protect any person with depression who had experienced during the previous five years an episode of depression lasting six months or so. Such a person would have received cover, but the Government opposed it. The other place considered it and passed the amendment.
	My colleagues and I feel that the Government have somehow boxed themselves into a corner on this matter. As the Minister acknowledged when I intervened a few moments ago, there are some modifications—very welcome modifications in respect of cancer, HIV or multiple sclerosis—to the definition of disability in the clause. It would have been sensible for the Government to leave the amendment in the Bill, not seek to reject it. MIND, an organisation intricately involved in working with people with depression, described the amendment as
	"a step in the right direction".
	The organisation also said:
	"The Government's insistence on removing the amendment makes it look like it is ignoring the problem in the vain hope that it will go away. It sullies what is, in most other respects, an excellent piece of legislation."
	We agree and we believe that disabled people will be puzzled by the Government's insistence on removing this provision from the Bill. I hope that they will take note of that intention in the next few weeks and beyond. If the Government press ahead and insist on removing the excellent amendment tabled by my noble Friend Lord Skelmersdale, we will divide the Committee on the issue.

Richard Allan: The amendment tabled in the other place also received the support of my colleagues as we felt that the circumstances of people with depression should be acknowledged more clearly in the Bill. We accept that helpful progress has been made, as the Minister said, in the context of people with mental health conditions. It has been accepted that mental illness no longer needs to be clinically recognised if it is to form the basis of mental impairment, but in a sense, that is a different point. That broadens the scope of the conditions that can be brought within the framework, but depression is clinically well recognised and we are considering whether the Bill would, without the amendment, provide sufficient protection for people who suffer from depression. The hon. Member for North-East Hertfordshire (Mr. Heald) referred to the patterns that depression may take and there remain genuine concerns about whether people with depressive illness who suffer discrimination will be sufficiently protected by disability discrimination legislation.
	The Minister made helpful reference in her introduction to the fact that further guidance may be necessary. If the Government have their way and the amendment proposed by the other place is removed, we would certainly want further discussions on the matter. That could be an alternative to having binding time limits set out in the Bill. Guidance could be sent out to the relevant public bodies, employers and so forth to inform them about the pattern of depressive illness that falls within the definition of a disability against which discrimination may occur.
	That could provide a helpful way forward, but as we stand at the moment, there remains the potential for people with serious depressive illness to be discriminated against. They could find that when they turn to the law, they do not have sufficient protection. That is our motivation for seeking to maintain a provision directly in the Bill. If that falls, I hope that the Minister will be able to advise us of alternative routes to the same objective, perhaps through guidance. As the Minister said, different forms of mental illness have different patterns of recurrence. We do not wish to discriminate between them, but to ensure that they are all properly covered.

Clause 46
	 — 
	Short Title

Bill Wiggin: The Government will have heard the hon. Gentleman's sensible suggestion. However, if we pass the Bill, I do not think that we will be able to amend it at a later date to change the length of the term. I suspect that that might become a matter for the Assembly. The important thing today is to clarify exactly why the Welsh Affairs Committee suggested a "five plus five" solution.
	The point about an initial seven-year period is valid and helpful. A seven-year term is still too long, but such guaranteed longevity does not provide the ombudsman with the best circumstances in which to operate in the long term. The objections that a five-year term is too short, that it would not attract top quality candidates and that it could affect the ombudsman's decisions towards the end of his term are particularly cynical. I hope that an ombudsman who is likely to be influenced by the prospect of not having his term renewed will not be appointed to begin with.
	If the post does not attract high quality candidates, what does that say about the people who seek election to this place? Hon. Members are appointed for up to five years. Invariably, some of us are appointed for less time. I can see no reason why five years should not be the time period. Nor do I understand why the difference between a five-year term—in all likelihood to be renewed for a further five years—would make a great deal of difference to the calibre of candidates. That the term of office should be long enough to attract the "right kind of person" to the post, as suggested in the other place, raises the question: what does the "right kind of person" refer to? Surely those deterred by the fact that they may only serve a five-year term instead of seven years might not be the right kind of person in the first place.
	The best candidates for the position of ombudsman should be dedicated to the job of being an ombudsman regardless of the length of tenure of office. If he or she is of the highest calibre, in practice they will serve a term of 10 years anyway, which is even better than the seven years. The arguments against that are not sufficient to explain the Government's inflexibility. It is simply a poor argument to suggest that good quality candidates would be deterred from applying for the office if the term is only five years long.
	New Zealand set the precedent for ombudsmen, establishing the first ombudsman in the English-speaking world more than 40 years ago in 1962. Its system is similar to ours and the appointments are made for five-year terms, with the possibility of reappointment. The situation is the same in other Commonwealth countries, and the ombudsman Act in Alberta, Canada states:
	"a person appointed as Ombudsman holds office for 5 years . . . until the person is reappointed, or the person's successor is appointed".
	Other ombudsman appointments across the UK show a similar pattern. The chief inspector of schools is appointed for five years. No parliamentary and health service ombudsman has served for longer than five years. All appointments to the Independent Police Complaints Commission are for five years, with the possibility of a five-year extension. It does not seem that the length of term of office for such posts has deterred high calibre applicants. Indeed, I wonder why so many other ombudsman schemes would use that pattern if that were the case.
	The Scottish public service ombudsman—perhaps the closest model to that proposed for Wales—is an appointment of five years with the opportunity of reappointment. It is clear that the working of the arrangement has been successful as part of the clearly beneficial establishment of a single ombudsman service for Scotland. It achieves what is effectively to be a 10-year term if all goes well, as Mr. Eric Drake, the Scottish deputy public service ombudsman, said in evidence to the Welsh Affairs Committee on 17 January.
	Under our proposal, those who consider a 10-year term most appropriate would still achieve that objective, yet the ombudsman would also be accountable at the halfway stage. To achieve the original aim of a 10-year term, while also making the ombudsman accountable and the role reinvigorated, an appointment for five years, with a five-year renewable option, is clearly best. That is by far the most appropriate way to proceed in achieving a balance between an accountable and flexible term of office and the need for stability.
	The Welsh Affairs Committee agreed with that, stating that a reduction in the length of the ombudsman's tenure, from 10 years to seven, would not improve the Bill, and it agreed with the renewable five-year appointment. Page 9 of the Select Committee report states:
	"we recommend it reconsider appointments on a five year basis with the possibility of reappointment for a further five years."
	A recently published report on the Bill by the National Assembly's Local Government and Public Services Committee similarly recommends that
	"the bill be amended to make the Welsh Ombudsman's term of office five years with the ability to reappoint for a further five years."
	The opinions of those who have debated the issue in the other place, in the Select Committee and in the Assembly are clear. Furthermore, it was clear in our debate on Monday that there was widespread support for a renewable five-year term. As the Chairman of the Welsh Affairs Committee, the hon. Member for Clwyd, South (Mr. Jones), said:
	"I believe that the five-year plus five-year appointment plan, which is used for the Scottish ombudsman and thus has the benefit of consistency, represents a better balance between the need for stability in post and the need to reinvigorate the office periodically. It also offers opponents of a 10-year appointment a statutory moment for reflection."
	The hon. Member for Brecon and Radnorshire (Mr. Williams) commented:
	"I, like other hon. Members, am disappointed that the Government cannot accept that the term of appointment for the ombudsman should be five years, with the possibility of a five-year reappointment . . . Seven years is a halfway time period, but the Bill does not provide the opportunity for reappointment, so that provision has all the faults and none of the virtues."—[Official Report, 4 April 2005; Vol. 432, c. 1146–47.]
	I think that the hon. Gentleman was absolutely right.
	The Government must accept that a renewable five-year-term appointment is greatly preferable to the proposed seven-year tenure. Although it is clear that there is general consensus in favour of the Bill becoming an Act, were it amended to provide for a renewable five-year term for the ombudsman, it would be even better.

Don Touhig: I may not be tempted down that road. I have no crystal ball and I would not like to speculate whether there will be any changes to the government of Wales legislation at some time in the future. What my hon. Friend says would be accurate, but I would not wish to be tempted at this stage.
	Much has been said in the House and in the other place about the virtue of the public service ombudsman in Scotland being a five-year appointment, with an option of a further five years. But Scotland has not yet reached the end of its first five-year term, so we do not know whether it is a better model than the one that we are proposing.
	On Second Reading, the hon. Member for Leominster referred to the Welsh Affairs Committee report and its response to the Bill. The Committee recommended:
	"That the Government reconsider its decision to reduce the length of tenure of the Ombudsman in the light of our evidence",
	but added:
	"Should the Government believe that a balance needed to be made between security of tenure and the opportunity to reinvigorate the office,"
	the Committee recommended that the Government
	"reconsider appointments on a five year basis with the possibility of reappointment for a further five years."
	I formally responded to that report earlier today, setting out the Government's position.
	In view of the comments made by the hon. Members for Leominster and for Hazel Grove, I should draw attention to the fact that when taking evidence the Committee did not, to my knowledge, directly pose the question to all witnesses as to whether the appointment should be for a single fixed term or a fixed term renewable. In most instances witnesses were asked whether they thought a fixed term of 10 years was appropriate. If asked again, those same witnesses may be content with a fixed-term appointment of seven years. We simply do not know.
	Finally, it is not entirely clear whether the amendment moved by the hon. Member for Leominster is intended to have the effect that, if renewed, the ombudsman's second term would flow straight after his first term. I think that is probably the intention, but if it is not, the amendment would have an unintended consequence. Paragraph 4(4) of schedule 1 provides that any person who has been appointed as an acting ombudsman is eligible for appointment as the ombudsman, unless he has already held office as the ombudsman. That was drafted on the basis that the ombudsman's appointment would be a single fixed-term appointment.
	If the amendment does not have the effect that I described, it would mean that a person who had been the ombudsman for five years and who had stepped down and taken up the post of acting ombudsman could not seek a renewal of appointment as the ombudsman for another five years because of paragraph 4(4) of schedule 1.
	I hope that, after that brief explanation, the hon. Gentleman feels reassured that we are trying to strike a difficult balance. I believe we have made the right decision. Time will tell. I hope that, in light of my comments, he will feel able to withdraw his amendment.

Bill Wiggin: Not for the first time this evening, I agree with the Minister. I was concerned that should my amendment have been carried, the Bill would not have made it on to the statute book. As the Minister says, this is a worthwhile Bill, and I, too, pay tribute to the Committee in the Assembly as well to my colleagues and my noble Friends in the other place.
	As I stated on Second Reading on Monday, this is a helpful Bill with clear potential to improve the standard of public services for the people of Wales. I have previously raised my concerns over the need for us to be certain that Welsh taxpayers' hard-earned money is spent wisely in the implementation of the changes that the Bill outlines, and through my amendment I have also touched on areas where the Bill could have been improved. However, the Bill is helpful in achieving the best for the people of Wales, and while it might have been more constructive had the term of office been a little shorter, it is still acceptable.
	We have also seen considerable improvements as a result of the amendments tabled by my Conservative colleagues in the other place. My noble Friend Lord Roberts of Conwy achieved the inclusion of the provision ensuring that the Secretary of State must consult the Assembly before recommending a person for appointment as the ombudsman. That will assist in securing a more accountable and impartial appointment. I am also thankful that the ombudsman will have a level of political independence because of the fact that he can be removed on the grounds only of ill health or misbehaviour, and that he can in the last resort seek the view of the High Court. That gives him the legal power that will remove any possibility of his decisions being ignored by the authorities involved.
	In seeking to achieve the very best for the people of Wales, we are happy that the Bill will make it on to the statute book. It is a helpful Bill and I am glad that I have been able to play my very small part, along with all those whom I have mentioned.

Clause 13
	 — 
	Exercise of Commissioners' Functions by Officers

Andrew Tyrie: I am disappointed that the Minister did not feel that he had anything to say. Some interesting concessions have been made in the other place, where some valuable work has been done by the Earl of Northesk and Baroness Noakes. I am glad that the Government decided not to ignore that, even if they ignored us when we tried to make pretty much the same points in Committee.
	It is important to put the amendments into context. Although we did not oppose the Bill on Second Reading, we had a number of major concerns about it. Merging the departments involved is a major change, and we are not convinced that it was given enough consideration in government or that its implementation was properly thought through. We are also worried that the measure might prejudice taxpayer confidentiality. Taken together, all those things might put at risk some of the yield.
	The Lords amendments go a small way—it is only a very small way—towards assuaging some of those concerns. Lords amendment No. 1 applies to clause 13. It limits the scope for disclosure of information by a Revenue officer. The duty of confidentiality is, of course, extremely important, and it helps to protect the yield. It is why a number of us fought very hard to retain the oath of confidentiality, which the Government had intended to abolish and on which they relented at the last moment in Committee. The amendment provides that Parliament will ensure that commissioners have a measure of control over disclosure, except in very limited circumstances. We will not oppose it, although we would have liked something stronger.
	Anybody forming a view on the matter must examine what Lord Goldsmith said about it in another place, where he set out the circumstances in which an officer might feel the need to give specific instructions to disclose information. If that power were to be abused, MPs would hear about it, in which case I hope that they would make a great noise and that we would return to the issue.

John Burnett: We have had long discussions about taxpayer confidentiality, and the provisions in the Bill contain some useful protections in that regard. We share the desire of the hon. Member for Chichester (Mr. Tyrie) and other Conservative Members to see the oath retained.
	I have asked Inland Revenue employees about the oath, which not only buttresses taxpayer confidentiality, but strengthens the position of Inland Revenue employees should someone in a superior position ever seek for them to compromise their integrity on taxpayer confidentiality. As the hon. Member for Chichester has said, it is important that we do nothing to erode taxpayer confidence, otherwise the tax yield is surely at risk.
	We welcome the limits on disclosure and noted what the Attorney-General said in the House of Lords on 5 April 2005. The case of Pepper v. Hart is instructive, and hon. Members and tax professionals are only too well aware of the protections that the Attorney-General put on the record.
	We are happy to welcome the provision, and we hope that the Bill will be a success. We also hope that the Inland Revenue culture will prevail and that Customs, which has been subject to certain criticisms, will become more receptive to taxpayers' interests, fairness and the rule of law, which should be the culture that guides Revenue and Customs after the merger comes into effect.

Andrew Tyrie: I am very grateful to you, Mr. Deputy Speaker, for allowing me to make pertinent remarks on the remaining clauses. Perhaps I can also get in some more general remarks that might reasonably be made in response to the Minister's points.
	The most important element of the remaining clauses was the almost untrammelled power given to the Treasury to make regulations under the original Bill.   Their lordships have rightly argued that such power should be circumscribed more tightly. The Conservatives in the Lords proposed that any change to the power of disclosure be subject to what is known as the super-affirmative resolution procedure, which was originally laid down for use in respect of the Identity Cards Bill. Under that procedure, regulations can be amended—in other words, more tightly drawn—which is what is desired in this case.
	Of course, that proposal has been around for a long time—the royal commission on House of Lords reform came up with it some time ago—but the Government, having flirted with it, decided that they did not like it. They have rejected that approach in this Bill and have included something else instead, and that is what we are debating now and have to examine. They have established in a reasonably detailed way the conditions that have to be satisfied in order for disclosure to be permissible. Those who are following this debate carefully can look at proposed new subsection (8), where they will find a list of those conditions. As I said a moment ago, they cannot be considered independently of the surrounding clauses.
	Having listened to the Minister and, more particularly, having read the Hansard account of the Lords debate on this issue, I do worry about the differences and misunderstandings that could develop in the merger of these two cultures. Much of the debate in the other place was at cross purposes. Some peers focused all their arguments on trying to protect taxpayer confidentiality, while others tried to ensure that powers were retained to enable the catching of criminals at the border. It was like two cultures passing in the night: one worry was an Inland Revenue worry, and the other was primarily a Customs worry. In addition to the threat to revenue that we briefly alluded to, a major concern remains about the risk associated with merging these cultures. These amendments and our discussion of them reflect that risk. I note that Lord Goldsmith conceded some ground on this very point in the Lords. The amendments are a step forward, but only a very modest one.
	A moment ago, the Minister welcomed our comments on confidentiality. That was a great change in tone compared with the beginning of the debate on this Bill, when we had to struggle to convince the Government to keep the oath. I am very pleased that there has been a change of tune in that regard.

Mr. Deputy Speaker: With this we may discuss Lords amendment Nos. 2 with Government motion to disagree, Lords amendment No. 3 with Government motion to disagree, Lords amendment No. 4 with Government motion to disagree, Lords amendment No. 5 with Government motion to disagree, Lords amendment No. 6 with Government motion to disagree and Lords amendment No. 7 with Government motion to disagree.

Tony McNulty: I am sure that the House authorities are entirely in order in putting the provisions together in this way, but it makes it sound as if there was a good deal of disagreement with the other place. I want to put on record the fact that I commend the other place for the way in which it has scrutinised and ultimately dispatched the Bill—and with a good deal of agreement.
	There is but one real issue on which we disagree in this set of amendments and it is about passenger transport executives and their ability to have co-signatory status. The existence of seven Lords amendments and seven disagreements with them does not mean that there was untold disruption or disagreement with our noble Friends in the other place.
	I have said before and it has been explained clearly in the other place that the Government cannot accept these amendments. As the noble Lord Davies of Oldham said earlier today, they raise a matter of principle about which the Government are clear. There is a new role for the PTEs and it is required because the current system was built for a different time and does not fit in with the new framework set out in the White Paper.
	Throughout our deliberations, all sides have made it clear that the context for the debate is the rail White Paper, not all of which has necessarily been picked up in the Bill. Central to the new structure set out in that document is the role of the Secretary of State in setting the strategic direction and the amount of national funding that will be invested in the railways. The system that the PTEs are seeking to retain is totally inconsistent with that principle and more reminiscent of another time.
	The Government have listened carefully to the concerns raised here and in another place about PTEs. As I have said, we have moved considerably from our original position. In the original citation in the rail White Paper concerning this aspect of PTE functions, we were minded to remove all their ability to have co-signatory status. We have moved away from that and the PTEs, with the agreement of the Secretary of State, can have a role to play.
	We considered the proposal made in another place for a 60-day window for PTEs to delay before the signing of a franchise. We are unconvinced that that would deliver anything other than costly delay and an opportunity for PTEs to seek to reopen negotiations at the eleventh hour. Potentially, each month's delay in completing a franchising process could cost hundreds of thousands of pounds of taxpayers' money. Clearly, that would be inconsistent with our strategy to deliver efficiency and value for money in the rail industry.
	I want to make it very clear, to this House and to the other place, that we feel that we cannot compromise on co-signing or co-specification. Basically, the amendment would allow PTEs to dictate to the Secretary of State—who is responsible for rail across the whole country—what services should be provided in their areas. The right to co-sign puts the PTEs on an equal legal footing with the Secretary of State, despite the fact the Secretary of State provides the overwhelming majority of funding, with PTEs merely contributing at the margins. Such a system would not make sense: it would merely encourage confrontation and retain the adversarial approach that has been prevalent since co-signatory status was introduced in 1993.
	I wish to reassure the House that the provisions are not about removing the important influence and input that PTEs have into the rail services in their areas. That is why the Bill, as introduced, means that the Secretary of State will be under a duty to consult with the PTEs before issuing an invitation to tender for any franchise that includes services to, from or within a PTE's area. This will be a full and detailed consultation, giving the PTEs a clear opportunity to set out the needs and ambitions of their areas.
	Once the baseline specification for a franchise, including services in PTE areas, has been set, the PTEs will also have the right to amend the services in their areas—that is, buying additional services, or reducing services and retaining the savings. That will give them much greater flexibility to make choices about the balance of transport in their areas than currently prevails and allow them to make rational decisions based on financial accountability.
	Equally, our proposals will not change the mechanism by which PTEs can secure certain rights, such as rights to information, or the right to insist on the train company's involvement in concessionary fares or integrated ticketing. Such rights and responsibilities will continue to be included in franchise agreements as long as the Government are confident that they are necessary and add value. That will remain the case whether or not PTEs are co-signatories.
	Neither will the Government's approach reduce the PTEs' ability to maintain their constructive and beneficial relationships with the train operating companies. Centro, the West Midlands PTE, did not co-sign the Chiltern franchise, but it has managed to build an excellent, productive relationship with that TOC. The Government's approach does not attempt to limit local decision making as has been suggested but merely places that in its proper context.

Peter Luff: This is one of those dangerous questions to which I do not know what the answer will be so I hope that the Minister can help me, although that may not be helpful to my party. He may know that I am concerned about the impact that the specifications available to the West Midlands PTE can have on services in the peripheral area. The great power of the PTE sometimes means that local authorities such as Worcestershire and Herefordshire do not receive the services they would like to the conurbation because they are outgunned by the PTE. What impact, if any, would the amendment have on that?

John Thurso: May I say at the outset and by way of very short preface that this is a good Bill? It contains a great many things with which I agree, not least the point that the Minister raised of devolution to Scotland. It is an important piece of devolution that will allow my colleague in the Scottish Executive to deliver good transport solutions on railways for the Scottish people. Therefore, I am with the Minister in the statement that he made that the Bill should not be lost.
	I am pleased with some of the compromises. Indeed, I also associate myself with the remarks regarding the way in which the other place has worked on the Bill that have been made by the other two Front Benchers. I am pleased that the Government have seen fit to compromise, where sensible, both in the those compromises that have already taken place and the one that may be promised later today. As the right hon. Member for East Yorkshire (Mr. Knight) just said, that does not mean that we should roll over and agree to the Government's view on Lords amendment No. 1. The Government have got this wrong and it would be worth their while thinking again.
	I am sorry that the Government have chosen to reject Lords amendment No. 1 and its consequential amendments because the proposal made by my noble Friends and supported by Lords on both sides of the House, not least by those on the Government's Back Benches, is reasonable and seeks to address a deficit in the Bill.
	I listened with great care to the Minister's comments. He is always reasonable and he dealt with us very reasonably in Committee. I understand his argument, but he has not persuaded me. I do not understand why, when we are seeking to give people the right to consider decisions locally, it was not possible to find a way in which that expression could be put into the Bill.
	The arguments have been well rehearsed in the House throughout all the debates on the Bill and pretty well rehearsed in the other place during most of its stages there. The issue is simple: PTEs in England have a responsibility—I would say, a right—to deliver sound transport solutions in their areas. Rail must be a key part of those solutions and, prior to the amendment made in their lordships' House, the Bill removed from PTEs their involvement in the rail process, taking that entirely to the Secretary of State for Transport—apart from an ability to consult—thus removing rail from the responsibility of PTEs.
	Lords amendment No. 1 is reasonable, because it seeks to reintroduce into the Bill some way in which PTEs can fulfil that duty and recognises the Government's right desire to ensure that decisions are made timeously and expeditiously. The Lords put into the amendment a 60-day limit, thus permitting a reasonable compromise between no involvement whatsoever and a far too lengthy system, which is precisely what the Government wish to avoid.
	The Minister talked of months of delay in the process. All the processes that I have seen for franchise letting tend to take many months and I really do not think that any franchise process would take less than three to five months to undertake. To give at the beginning of that process a notice that there are 60 days in which a PTE can become involved would not necessarily disrupt that process.
	The Minister also said that the proposal would not fit in with the post-White Paper world. I do not accept that. As he knows, I support the provisions of the White Paper and am happy that they should be legislated for, but I do not see why the Lords amendment could not be accommodated in some way. I therefore have to say to my right hon. and hon. Friends that we should vote in favour of the Lords amendment or, at the very least, give the Lords an opportunity to make the Government think again.

William Cash: I am interested in the provision because it pertains, among other things, to the question of station services and bus substitution services, which are a direct matter of concern in my constituency. I accept that the Minister has not yet taken over the responsibilities of the Strategic Rail Authority, but we had a constructive meeting last Saturday with the SRA about Stone and Norton Bridge stations, the famous station at Wedgwood and the one at Barlaston that are on the line that is now subject to closure. However, the SRA cannot now make any assumptions about what is in mind for those stations.
	The problem is that enormous inconvenience will be caused to my constituents if the stations on that line are closed. There is a petition and strong campaign—with which, as you might imagine, Madam Deputy Speaker, I am fully associated—to keep the stations open. I am glad to say that there was a constructive atmosphere at the meeting last Saturday, but the matter needs to be sorted out.
	Bus substitution services would come within the framework of clause 13. If a franchise agreement were issued, the Secretary of State would have to consult the executive about a range of matters including station services. I note that station services are defined in clause 13(9) as
	"services provided in connection with any such service for the carriage of passengers by railway".
	That is an issue of grave concern to my constituents. When the Secretary of State takes over the role, I will want to know for sure that there would be no question, when he consults the executive in that area, about his sticking with what the SRA has clearly indicated at that important meeting. The stations at Stone, Norton Bridge, Wedgwood and Barlaston would be kept open. It is an important matter for my constituents, not least because the service is part of the community in that area.
	I looked up this afternoon the private Act that gave rise to the creation of this railway in 1846. It has been pivotal to the community for the whole period since then. In a positive and constructive sense, we would also like to look forward, as I said at the meeting, to cross-country trains—

Madam Deputy Speaker: With this it will be convenient to take Lords amendments 9 to 13, and 15 to 17.

Tony McNulty: I can certainly give my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) that assurance. As I said, the Lords amendment far more readily offered an open and blank cheque in those terms, and took away from Ministers the ability to control budgets, as ultimately they should, as well as impacting on the primacy of the contract, which is why I am grateful for the agreement of both Front-Bench spokesmen. Without pursuing the point, the words that we have offered in lieu far more readily and in a neater and more efficient way address the concerns raised, with the caveat from my hon. Friend, rather than the existing words, and in that context, I commend them to the House.
	Lords amendment disagreed to.
	Government amendments (a) to (e) in lieu of Lords amendment No. 14 agreed to.
	Lords amendments 15 to 17 agreed to.
	Committee appointed to draw up Reasons to be assigned to the Lords for disagreeing to their amendments Nos. 1 to 7: Mr. Greg Knight, Mr. Khalid Mahmood, Gillian Merron, Mr. Tony McNulty and John Thurso; Mr. Tony McNulty to be the Chairman of the Committee; Three to be the quorum of the Committee.—[Gillian Merron.]
	To withdraw immediately.
	Reasons for disagreeing to certain Lords amendments reported, and agreed to; to be communicated to the Lords.

Alun Michael: I celebrate the agreement on the amendment. This is an important Bill which will play an important part in creating clean neighbourhoods. I am delighted that despite the imminence of an election we can agree.
	Lords amendment No. 1 agreed to.

Clause 3
	 — 
	Drug Offence Searches: England and Wales

Andrew George: I am delighted to have secured what may well be the last Adjournment debate of this Parliament, particularly on such an important issue as acute hospital funding. It is a serious issue for many MPs, but I want to speak about particular concerns in my own constituency in the far west of Cornwall and the Isles of Scilly.
	At the outset, I declare an interest in that my wife is a nurse working in the NHS—unfortunately, only in a nursing bank at the moment. She has worked all her working life in the NHS. A second declaration of interest is that I was a patient last week at one of the hospitals that I shall mention in the debate. I was there for day surgery just over a week ago, and I must say that an excellent service was provided.
	I also want to say at the outset—the Minister will be pleased to hear me say it—that I appreciate the dedication and professionalism of NHS staff. I say that not because my wife works in the NHS, but because I genuinely appreciate those characteristics of the NHS. The Liberal Democrats campaigned at the last general election for increased taxation and investment in the NHS, so I am also pleased to welcome the additional resources that the Government have invested in the NHS in recent years. The funding is much needed and much appreciated.
	The title of the debate is "Acute Hospitals (Funding)", but I recognise that such funding does not come in a separate silo from other funding going via primary care trusts into primary and general health care. The Minister will no doubt refer in his response to the extra funding going into Cornwall's three PCTs and health trusts. Certainly, substantial additional amounts of money are going into Cornwall PCTs, but my first main point is about how that money compares with funding in other parts of the country.
	The Minister will know that the three Cornwall PCTs are in significant deficit and have been over the past three or four years. They are working hard to achieve a recurring balance, but the Minister will also be aware that the National Audit Office produced a report on 28 April last year that identified the fact that only three PCTs in the UK had overspends of more than £5 million in 2002–03. All three were, of course, the Cornish PCTs.
	That raises the question not of management failure in Cornwall, but of whether the funding formula properly reflects the challenges presented to those who have to manage the budgets and meet national targets for NHS spending and care in an area such as Cornwall.
	The task of providing health care in Cornwall and the Isles of Scilly is especially challenging, and the formula does not take full account of what I call the geographical difficulties that the area faces. Some people ascribe those difficulties to peripherality, rurality or insularity but, unlike other parts of the country, Cornwall cannot call on emergency services to the north, west or east. The ambulance funding formula takes account of geography to a small extent, but PCT funding does not do so at all.
	Another challenge to the provision of health care in the area is posed by demography. Cornwall's population tends to be much older than is the case with other areas, and the county also has more tourists than elsewhere. I understand that the Department cannot write off the debts incurred by the local PCTs, which are trying incredibly hard to achieve recurring balances in their budgets, but perhaps we should look at the appropriateness of the levels of funding made available to them.
	For example, the West Cornwall PCT anticipates a deficit of only £5.9 million this year, a significant reduction from last year. Ultimately, that debt must be recovered and paid off, but the market forces factor is already critical and will become even more important in future. That factor involves an assessment of external labour market costs, but wage levels in Cornwall have been the lowest in the country since records began. This year, the market forces factor will kick in much harder than has been the case since its introduction in 1976, and it will come as no surprise that the impact will be very significant. In fact, funding for West Cornwall PCT will be the lowest in the country as a result.
	Is the Minister satisfied that it is right that the market forces factor should have such a substantial impact on available funding, given that it will leave Cornwall and the Isles of Scilly seriously short of money, in comparison with the rest of the country? That will happen even though the area faces obvious additional costs—as a result of the geographic, demographic and other challenges that I have set out—that are not reflected in the formula. Moreover, as I said, the PCTs must also tackle the requirement to balance the crippling deficits that they face. In addition, will the Minister say which Departments funding locally delivered services—such as social services, police and education, whose staff are primarily paid according to national pay scales—use the same market forces factor in their funding formula?
	I come now to the impact of funding on acute services. Cornwall's main district general hospital is the Royal Cornwall at Treliske. It serves some 400,000 of the county's population of a little over half a million people, and it has just over 1,000 acute beds and 174 consultants. The two other hospitals in the county are St. Michael's in Hayle, and the West Cornwall hospital in Penzance, which deal primarily with elective and day care work. In the past, the Penzance facility has taken a lot of blue light and emergency admissions, although that happens less nowadays.
	The lowering of the protocols mean that more blue light incidents and emergencies pass West Cornwall hospital's front door on their way to Treliske, and that the emergency services are under increasing pressure. I shall return to that matter, but before this debate I sent the Minister some information about the services available in the county. As I said earlier, it is not possible for us to seek additional services in areas to the north, west or south, and the situation in the area covered by the Royal Cornwall Hospitals Trust contrasts with what happens in Northumbria and Calderdale. Those areas have three and two DGHs, respectively, and their populations are roughly the same as Cornwall's. There should be a serious review of whether putting all the eggs—emergency and acute services—into one basket is appropriate. That can be dangerous. On 9 March, less than a month ago, there were 30 patients on trolleys and on the days before and afterwards ambulances were queuing outside unable to offload patients into the hospital. The bed managers were trying desperately to discharge 95 patients to community hospitals only a year after 100 beds in those community hospitals were closed.
	The desperate situation has been caused by a funding crisis and because all acute cases are brought into one hospital. It is unacceptable that beds in the primary sector have been removed when there are layers of chief executives and boards. Thirteen chief executives run services in Cornwall and it is impossible to have a strategic view when there are three primary care trusts, two delivery trusts, two social services departments—one in Cornwall and one on the Isles of Scilly—an ambulance trust, the strategic health authority and replication on the south-east and north-east borders of Cornwall. Instead of all that bureaucracy, we need a clear strategic view and a focus on the care provided in the acute sector.
	The proposal for West Cornwall hospital—I have been working for it with the strategic health authority and others—is rebuild with perhaps a doubling of the number of beds. The strategic health authority, the acute trust and the PCT agree that that is a desirable objective and we will work together to try to achieve that new build so that the hospital can take more patients and emergencies. But how can the money be found for new build when capital building programmes require the money to be repaid from revenue and the revenue is insufficient?
	I am encouraged that after my hard work and that of many others in the local community, the Labour prospective parliamentary candidate—none of us has heard of him—has issued a leaflet saying that we need a 24-hour accident and emergency unit based in Penzance. That is encouraging—I presume that he was given permission to say that by the Minister—because we have campaigned for that for a long time. I hope that the Minister will confirm that the Government support that.
	I had a helpful meeting with the Minister in June last year when those proposals received broad support and recognition that they need to be taken forward. I have an easy question for the Minister. Can he assure me that if the strategic health authority, the PCT and the Royal Cornwall Hospitals NHS Trust want that his Department will provide all the assistance it can?
	My third and final point concerns the impact of Government proposals for independent sector procurement. I understand that the intention for wave two funding under the NHS improvement plan published in June 2004 is to set a target of about 15 per cent. elective activity from private sector providers. I also understand that a number of targets will be set to lead to that overall target during the forthcoming year, but as well as elective procurement, additional announcements have been made for targets for budgets for diagnostic and pathology procurement from the private sector.
	The problem is that in a place like Cornwall it is not appropriate to seek elective work from the private sector because of the challenges of our geography. Furthermore, if we have to plan for obtaining diagnostic services from the private sector, it will undermine our attempts to build up the critical resources and capacity of the small hospital in west Cornwall; for example, by installing a CT scanner. It would be helpful if the Minister will reassure me that the Government will step back from those targets, especially in places such as Cornwall. The Department seems to be indicating that previous intentions and targets may not be pursued with the vigour that was suggested last year. Will private sector procurement plans be pursued according to the targets set in the NHS improvement plan?
	These issues are important to many of my constituents, who are concerned about the difficulties relating to the funding formula in Cornwall and the impact on NHS services, especially the acute sector. I am sure the Minister accepts that the area presents some significant challenges. The geography is challenging and a high number of tourists visit the area. We must ensure that we have the capacity to cope.

Stephen Ladyman: I congratulate the hon. Member for St. Ives (Andrew George) on securing the debate. I know that he feels strongly about the national health service and he is right to congratulate NHS staff throughout the country and in Cornwall on their excellent work—his wife included, no doubt. I am pleased that he acknowledges the funding that is going into the NHS. I reply to many Adjournment debates and usually—certainly when Conservative Members are raising these issues—one would think that we were spending less than in 1997 rather than about double.
	The latest round of revenue allocations to primary care trusts, covering 2006–07 to 2007–08, represents further investment in the NHS of no less than £135 billion: £64 billion to PCTs in 2006–07 and £70 billion in 2007–08. That is equivalent to an average increase of 9.2 per cent. for 2006–07 and 9.4 per cent. for 2007–08, and an average of 19.5 per cent. over the two years.
	The hon. Gentleman said that I would give him lots of figures and he is quite right. With an election under way, I am not likely to let anybody forget that the Labour Government are responsible for a huge reinvestment in the NHS. His constituency has benefited, too. PCTs in Devon and Cornwall will receive cash increases of more £368 million for the two-year period. The West of Cornwall PCT, in the hon. Gentleman's constituency, will receive an increase of £37.4 million or 19.9 per cent. for the two years. Those are considerable increases in funding, however we cut it.
	The hon. Gentleman raised issues about the funding formula specific to his constituency. I have been a Health Minister for two years and have thoroughly enjoyed it. Electorate and Prime Minister willing, I shall be delighted to carry on for another years. In that time, I have answered an awful lot of Adjournment debates and have heard reasons from every Member of the House as to why his or her constituency is a special case and needs special additional funding. The hon. Gentleman's argument is the first that I have had real sympathy with, because my constituency, too—albeit in east Kent—has land to only one side and it had never occurred me to use that as an excuse for trying to wheedle some more money for the health service. Now that the hon. Gentleman has done that, I shall bear it in mind, but I fear that I cannot be too helpful to him tonight.
	The formula that the Government inherited was not getting health services to the areas of greatest health need, so we undertook a wide-ranging review of it before the allocation rounds. The new formula provides a better measure of health need in all areas. In calculating health needs in rural areas, it takes account of the effects of access, transport and poverty. It uses better measures of deprivation that are capable of being updated regularly.
	The market forces factor of the allocations formula is not a new concept. In fact, all versions of the allocations formula for the past 20 years have included a market forces factor weighting to recognise the different costs of labour and land across the country. I hope that the hon. Gentleman would agree that it is right and proper that the different costs of land and labour are reflected in the allocations formula to ensure that funds are allocated fairly, but we did not just pluck the formula from the air. It is not an invention of Ministers or politicians. Its development has been overseen by the Advisory Committee on Resource Allocation, and it is the result of many years of analysis by academics.
	We recognise that this is a complex issue, and that is why we have sought the advice of experts to ensure that the model used to calculate these costs is fair. To the best of my knowledge, the hon. Gentleman has not made any objective criticism of that factor or challenged the opinions of those experts, other than to say that, because he does not like the result that the formula gives us, the formula must be wrong. It is my view that the market forces factor is the best mechanism available to reflect unavoidable differences in the cost of providing services.
	For the latest round of allocations—as I say, those for 2006–07 and 2007–08—changes have been made to that factor also to support the implementation of payment by results: the number of zones has been increased from 119 to 303, and they will match the geography of PCTs. An adjustment has also been made to the weights for multi-site trusts in the land and buildings indices.

Andrew George: I am not trying to wheedle out money, but the fact is that the Minister has not answered the question about why other Departments do not use a market forces factor, or something similar, in circumstances where national pay scales apply. In fact, people on local pay scales cannot undertake operations, for example, or provide the kind of service that those in hospitals provide on their national pay scales. That is the reason why the funding formula does not properly reflect the true costs of providing the service.

Stephen Ladyman: I note the hon. Gentleman's opinion. I cannot tell him why other Departments have not used such a factor. I suspect that Ministers from other Departments answer Adjournment debates on other evenings of the week in which they are asked why they do not implement the same formula as the Department of Health. The fact is that an expert advisory panel works out the allocation formula that we use, so we believe that it takes account of such factors in as fair a way as we can come up with, but if he can provide objective reasons to that expert panel that would lead us to believe that we have got it wrong, that is why the panel exists, thus helping us to refine the formula and to get it right in future years.